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YoY shift: Lean -
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is -0.40pp more bearish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
-0.64pp
Lean -
Net-tone change vs last year's 10-K.
MD&A
-0.16pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
adverse+3
failure+3
litigation+3
damages+3
disrupt+3
Positive rising
enhance+3
successfully+1
successful+1
efficiently+1
positive+1
Risk Factors (Item 1A)
10,253 words
Item 1A. Risk Factors.
The Company operates in a rapidly changing environment that involves a number of risks. The following highlights some of these risks and others are discussed elsewhere in this report. These and other risks could materially and adversely affect the Company’s business, financial condition, prospects, operating results or cash flows. The following risk factors are not an exhaustive list of the risks associated with the Company’s business. New factors may emerge or changes to these risks could occur that could materially affect its business.
Peabody Energy Corporation
2025 Form 10-K
Table of Contents
Risks Associated with Peabody’s Operations
The Company’s profitability depends upon the prices it receives for its coal.
The coal industry is competitive, highly regulated and subject to periods of significant volatility. Declines in coal prices could materially and adversely affect the Company’s operating results and profitability and the value of its coal reserves and resources.
Coal prices are dependent upon factors beyond the Company’s control, including:
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
terminated+10
loss+9
curtailment+2
declining+2
depletion+1
Positive rising
favorable+1
enhance+1
confident+1
progressing+1
collaborating+1
MD&A (Item 7)
10,857 words
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The Company’s discussion and analysis of the year ended December 31, 2025 compared to the year ended December 31, 2024 is included herein. For discussion and analysis of the year ended December 31, 2024 compared to the year ended December 31, 2023, please refer to Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Peabody’s Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on February 20, 2025 and is incorporated by reference herein.
Non-GAAP Financial Measures
The following discussion of Peabody’s results of operations includes references to and analysis of Adjusted EBITDA and Total Segment Costs, which are financial measures not recognized in accordance with U.S. generally accepted accounting principles (U.S. GAAP). Adjusted EBITDA is used by the chief operating decision maker, defined as Peabody’s President and Chief Executive Officer, as the primary financial metric to measure each segment’s operating performance against expected results and to allocate resources, including capital investment in mining operations and potential expansions. Total Segment Costs is also used by management as a component of a metric to measure each segment’s operating performance.
Also included in the following discussion of Peabody’s results of operations are references to Revenue per Ton, Costs per Ton and Adjusted EBITDA Margin per Ton for each reportable segment. These metrics are used by management to measure each reportable segment’s operating performance. Management believes Costs per Ton and Adjusted EBITDA Margin per Ton reflect controllable costs and operating results at the reportable segment level. The Company considers all measures reported on a per ton basis to be operating/statistical measures; however, the Company includes reconciliations of the related non-GAAP financial measures (Adjusted EBITDA and Total Segment Costs) in the “Reconciliation of Non-GAAP Financial Measures” section contained within this Item 7.
• demand for electricity and capacity utilization of electricity generating units (whether coal or non-coal);
• changes in the fuel consumption and dispatch patterns of electric power generators, whether based on economic or non-economic factors;
• competition with, and the availability, quality and price of coal and alternative fuels, including natural gas, fuel oil, nuclear, hydroelectric, wind, biomass and solar power;
• governmental regulations and taxes, including air emission or other environmental standards for coal-fueled power plants and renewable-energy mandates or subsidies;
• demand for steel, which may lead to price fluctuations in the monthly and quarterly repricing of the Company’s metallurgical coal contracts;
• competing steel-making technologies that do not use coal as a manufacturing input, such as electric arc furnaces;
• the proximity, capacity and cost of transportation and terminal facilities;
• global supply levels and production costs of thermal and metallurgical coal;
• tariffs, quotas, duties or other adverse changes to trade policy;
• global economic conditions, including inflationary pressures and foreign currency exchange rates;
• geopolitical developments and conflicts;
• weather patterns, severe weather and natural disasters;
• regulatory, administrative and judicial decisions, including those affecting future mining permits and leases; and
• technological developments related to alternative energy sources, coal-to-liquids or gas conversion processes and CCUS.
Thermal coal represented the majority of the Company’s coal sales by volume during 2025 and 2024, with most of these sales to electric power generators. The demand for coal used in electricity generation is affected by many of the factors described above, but primarily by (i) overall demand for electricity; (ii) the availability, quality and price of competing fuels; (iii) utilization of all electricity generating units and the relative cost of producing electricity from multiple fuels, including coal; (iv) environmental and other governmental regulations, including those related to permitting; (v) litigation and judicial decisions; (vi) sociopolitical views on coal; and (vii) the coal inventories of utilities. Gas-fueled generation has displaced and could continue to displace coal-fueled generation (particularly at older, less efficient units) as regulatory costs and other factors, such as declines in the price of natural gas, impact the operating decisions of electric power generators. Some electric power generators have elected to close coal-fueled generation units given ongoing pressure to shift away from coal generation. Many new U.S. power plants are being fueled by natural gas because gas-fired plants have been less expensive to construct and operate, are easier to permit based on emissions profiles and face fewer public and governmental objections. Increasingly stringent regulations and stagnant electricity demand in recent years have further reduced the number of new power plants being built. In recent years, these trends have lowered demand for coal consumed by electric power generators and could continue to reduce the volume of thermal coal that the Company sells and the prices that it receives, thereby reducing its revenue and adversely impacting its earnings and the value of its coal reserves and resources.
The Company also produces metallurgical coal for the global steel industry, which accounted for approximately 27% and 25% of its revenue in 2025 and 2024, respectively. Changes in governmental policies, regulations and steel industry conditions, including steel demand, could reduce demand for the Company’s metallurgical coal. The demand for foreign-produced steel both in international and U.S. markets is influenced in part by tariff rates on steel. Tariffs may affect the Company’s customers to the extent their steel imports are curtailed as a result of imposed tariffs.
Demand for metallurgical coal is also affected by the cyclical nature of the steel industry, technological developments in the steel-making process and the availability of substitutes for steel, such as aluminum, composites and plastics. The steel industry continues to adopt production methods that do not use coal, such as electric arc furnaces. Lower international demand for metallurgical coal would reduce the volume of metallurgical coal Peabody sells and the prices that it receives, thereby reducing revenues and adversely impacting earnings and the value of its coal reserves. Foreign government policies related to coal production and consumption could also negatively impact pricing and demand for the Company’s products.
Peabody Energy Corporation
2025 Form 10-K
Table of Contents
If a substantial number of the Company’s long-term coal supply agreements, including those with its largest customers, terminate, or if the pricing, volumes or other elements of those agreements materially adjust, its revenue and operating profits could suffer if the Company is unable to find alternate buyers willing to purchase its coal on comparable terms to those in its contracts.
Most of the Company’s sales are made under coal supply agreements, which are important to the stability and profitability of its operations. These agreements often form the basis for developing the coal reserves and resources required to meet contractual commitments, particularly in the U.S. For the year ended December 31, 2025, 25% of the Company’s revenue was derived from coal supply agreements with its five largest customers, which were primarily supplied under 19 coal supply agreements (excluding trading and brokerage transactions) expiring at various times from 2025 to 2028.
Many of the Company’s coal supply agreements contain provisions that permit the parties to adjust the contract price upward or downward at specified times. Prices may be revised based on inflation or deflation, price indices and/or changes in the factors affecting production costs, such as taxes, fees, royalties and changes in the laws regulating the mining, production, sale or use of coal. In a limited number of contracts, failure to reach an agreement on price adjustments may allow either party to terminate the contract. The Company may experience reductions in coal prices in new long-term coal supply agreements replacing some of its expiring contracts.
Coal supply agreements typically include force majeure provisions allowing temporary suspension of performance by the Company or the customer during specified events beyond the parties’ control. Some coal supply agreements allow customers to vary required purchase volumes during a particular period, and where coal supply agreements do not explicitly allow such variation, customers sometimes request amendments to allow for such variation. Most of the Company’s coal supply agreements contain provisions requiring the delivery of coal meeting quality thresholds for certain characteristics such as Btu, sulfur content, ash content, volatile matter, coking properties, grindability and ash fusion temperature. Failure to meet these specifications could result in penalties, including price adjustments, rejection of deliveries or contract termination. Moreover, certain agreements allow the Company’s customers to terminate their contracts if regulatory changes restrict the use or type of coal permissible at the customer’s plant or increase the price of coal beyond specified limits.
On an ongoing basis, the Company discusses the extension of existing agreements or new long-term agreements with various customers, but these negotiations may not be successful and customers may not continue purchasing coal from the Company under long-term supply agreements
The profitability the Company realizes from its coal supply agreements depends on a variety of factors, and price adjustment mechanisms may increase its exposure to short-term coal price volatility. If a substantial portion of the Company’s coal supply agreements were modified or terminated, the Company could be materially adversely affected if it cannot secure alternate buyers at comparable profitability levels. Coal prices can vary by mining region and country, and the Company cannot predict future market conditions or ensure that expiring long-term coal supply agreements will be replaced at similar prices or profit margins. In addition, the Company’s revenue could be adversely affected by a decline in customer purchases (including contractually obligated purchases) due to lack of demand, oversupply, cost of competing fuels or environmental and other governmental regulations.
Peabody Energy Corporation
2025 Form 10-K
Table of Contents
Risks inherent to mining could increase the cost of operating the Company’s business, and events and conditions that could occur during the course of its mining operations could have a material adverse impact on the Company.
The Company’s mining operations are subject to conditions that can impact workforce safety, delay coal deliveries or increase costs at particular mines for varying lengths of time. These conditions include:
• elevated gas levels;
• fires and explosions, including from methane gas or coal dust;
• accidental mine water discharges;
• adverse weather, flooding and natural disasters;
• hazardous events such as roof falls and high wall or tailings dam failures;
• seismic activity, ground failures, rock bursts or structural cave-ins or slides;
• key equipment failures;
• supply chain constraints or unavailability of equipment parts;
• variations in coal seam thickness, coal quality, the amount of rock and soil overlying coal deposits and geologic conditions impacting mine sequencing;
• delays in moving longwall equipment;
• unexpected maintenance problems; and
• unforeseendelays in implementation of mining technologies.
The Company maintains insurance policies that provide limited coverage for certain of these risks, which may mitigate their impact. However, there can be no assurance as to the amount or timing of any insurance recovery related to such losses.
The Company’s take-or-pay arrangements could unfavorably affect its profitability.
The Company has substantial take-or-pay arrangements with its port access and rail transportation providers, predominately in Australia, totaling $1.0 billion, with terms ranging up to 19 years. These agreements require the Company to pay a minimum amount for the delivery of coal regardless of actual usage. Although certain contracts allow previously paid amounts to be applied to future deliveries, these provisions have limitations and the Company may be unable to apply all such amounts so paid. The Company may also be unable to use all capacity for which it has previously paid. Additionally, these arrangements can incentivize continued coal deliveries during times when suspending operations might otherwise be economically preferable, effectively converting variable costs into fixed operating costs.
The Company may not recover its investments in its mining, exploration and other assets, which may require the Company to recognize impairment charges related to those assets.
The value of the Company’s assets has periodically been affected by numerous uncertain factors, some of which are beyond the Company’s control, including adverse economic conditions; declining coal-fired electricity generation; lower-than-expected coal pricing; technical or geological operating difficulties; an inability to economically extract its coal reserves and resources; and unanticipated increases in operating costs. These factors may trigger the recognition of impairment charges in the future, which could have a substantial impact on the Company’s results of operations. Given the volatile and cyclical nature of coal markets, it is reasonably possible that the Company’s current estimates of projected future cash flows from its mining assets may change in the near term, which may result in the need for adjustments to the carrying value of its assets.
The Company’s ability to operate effectively could be impaired if it loses key personnel or fails to attract qualified personnel.
Peabody relies on a number of key personnel, and the loss of any such individuals, absent an orderly transition could have a material adverse effect. The Company believes that its future success also depends on its continued ability to attract and retain highly skilled and qualified personnel in tight labor markets, particularly those with mining experience. Peabody cannot provide assurance that key personnel will remain employed by the Company or that it will be able to attract and retain qualified personnel in the future. Failure to retain key personnel or attract qualified personnel could have a material adverse effect on the Company.
Peabody Energy Corporation
2025 Form 10-K
Table of Contents
The Company could be negatively affected if it fails to maintain satisfactory labor relations.
As of December 31, 2025, the Company employed approximately 5,400 people (excluding employees at discontinued operations), including approximately 4,200 hourly employees. Certain employees are represented by labor unions under collective bargaining agreements that are renegotiated periodically, creating a risk that future agreements may not be renewed on reasonably satisfactory terms. Approximately 39% of its hourly employees were represented by organized labor unions and generated approximately 18% of the Company’s 2025 coal production. Positive relations with employees and, where applicable, organized labor are important to the Company’s success. Unionization of currently non-union operations could increase the risk of work stoppages, reduced productivity and higher labor costs. Also, failure to maintain good relations or successfully negotiate union contracts could potentially result in labor disputes, strikes, work stoppages, slowdowns or other production disruptions that could negatively impact the Company’s profitability.
The Company could be adversely affected if it fails to appropriately provide financial assurances for its obligations.
U.S. federal and state laws and Australian laws require the Company to provide financial assurances for mine reclamation; payment of workers’ compensation obligations, such as black lung liabilities; coal lease obligations; and other miscellaneous obligations. The Company has historically satisfied these requirements through third-party surety bonds or letters of credit. In recent years, the Company has also utilized deposits with regulatory authorities or cash-backed bank guarantees. As of December 31, 2025, the Company had $997.2 million of outstanding surety bonds; $227.2 million of letters of credit; $208.7 million of cash-backed bank guarantees; and $134.9 million of deposits with regulatory authorities in order to provide required financial assurances for post-mining reclamation, workers’ compensation and other insurance obligations, coal lease-related and other obligations and performance guarantees, in addition to collateral for sureties. Under the Company’s agreement with the providers of its surety portfolio, the Company has $383.6 million in cash held in trust accounts for the benefit of certain surety providers as of December 31, 2025.
The Company’s financial assurance obligations may increase or become more costly, and surety bonds or letters of credit may not be available to the Company, particularly as some banks and insurance companies have announced reduced support for thermal coal producers and other fossil fuel companies. Alternative forms of financial assurance such as self-bonding have been severely restricted or terminated in most of the regions where the Company operates. Failure to retain or obtain surety bonds, bank guarantees or letters of credit, or to provide suitable alternatives, could have a material adverse effect on the Company. That failure could result from a variety of factors including:
• limited availability, higher cost or unfavorable terms for new surety bonds, bank guarantees or letters of credit;
• an inability to provide or fund collateral; or
• a lack of available fronting banks in certain countries where the Company must provide financial assurances but its primary surety providers are not licensed or admitted.
As further described in “Liquidity and Capital Resources” of Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the Company has a surety transaction support agreement with the providers of its surety bond portfolio that expires on December 31, 2026. The Company’s failure to provide adequate collateral, or abide by other terms in the agreement, could invalidate the agreement and materially and adversely affect its business and results of operations. Failure to maintain adequate bonding could invalidate the Company’s mining permits and halt mining operations, which could result in its inability to continue as a going concern.
If the assumptions underlying the Company’s asset retirement obligations for reclamation and mine closures are materially inaccurate, its costs could be significantly greater than anticipated.
The Company’s asset retirement obligations primarily consist of spending estimates for surface land reclamation and support facilities at both surface and underground mines in accordance with federal and state reclamation laws in the U.S. and Australia as defined by each mining permit. These obligations are determined for each mine using various estimates and assumptions including, among other items, estimates of disturbed acreage as determined from engineering data, estimates of future costs to reclaim the disturbed acreage and the timing of these cash flows, which is driven by the estimated economic life of the mine and the applicable reclamation laws. These cash flows are discounted using a credit-adjusted, risk-free rate. The Company’s management and engineers periodically review these estimates. If its assumptions do not materialize as expected, actual cash expenditures and costs that the Company incurs could be materially different than currently estimated. Moreover, regulatory changes could increase the Company’s obligation to perform reclamation, mine closing and post-closure activities. The resulting estimated asset retirement obligation could change significantly if actual amounts change significantly from its assumptions, which could have a material adverse effect on its results of operations and financial condition.
Peabody Energy Corporation
2025 Form 10-K
Table of Contents
The Company’s mining operations are extensively regulated, which imposes significant costs, and future regulations and developments or differing interpretations of existing regulations could increase those costs or limit its ability to produce coal.
The coal mining industry is subject to regulation by federal, state and local authorities with respect to matters such as:
• royalty rates;
• workplace health and safety;
• limitations on land use;
• mine permitting and licensing requirements;
• reclamation and restoration of mining properties after mining is completed;
• the storage, treatment and disposal of wastes;
• remediation of contaminated soil, sediment and groundwater;
• air quality standards;
• water pollution;
• protection of human health, plant-life and wildlife, including endangered or threatened species and habitats;
• protection of wetlands;
• the discharge of materials into the environment; and
• the effects of mining on surface water and groundwater quality and availability.
Regulatory agencies may order a mine to be temporarily or permanently closed following significant health or safety incidents. Any such closure of one of the Company’s mines would disrupt production and sales and could require substantial expenditures to resume operations, potentially resulting in a material adverse effect on the Company’s financial condition, results of operations and cash flows.
New legislation, regulations or orders, as well as new administrative regulations or new interpretations by the relevant government of existing laws, regulations and approvals, related to royalty rates, employee health and safety or the environment may be adopted and may materially adversely affect the Company’s mining operations, its cost structure or its customers’ ability to use coal and may also require significant operational changes or increased costs for the Company or its customers. Some of the Company’s coal supply agreements contain provisions allowing a purchaser to terminate its contract if legislation is passed that either restricts the use or type of coal permissible at the purchaser’s plant or results in specified increases in the cost of coal or its use. These factors and legislation, if enacted, could have a material adverse effect on the Company’s financial condition and results of operations.
For additional information about the various regulations affecting the Company, see the sections entitled “Regulatory Matters - U.S.” and “Regulatory Matters - Australia.”
If litigationchallenging “climate superfund” laws is unsuccessful, the Company may be required to make significant payments for alleged climate change damages.
If the Company becomes subject to “climate superfund” laws and related regulations such as those recently passed in New York and Vermont, it may be required to make significant payments to the relevant governments. These payments may be material and could adversely affect the Company’s results of operations, financial condition or cash flows.
The Company’s operations may impact the environment or cause exposure to hazardous substances, and its properties may have environmental contamination, which could result in material liabilities to the Company.
The Company uses hazardous materials in its operations and periodically generates limited quantities of hazardous waste. Various laws, including CERCLA and RCRA in the U.S. and similar laws in other countries where the Company operates, impose liability relating to contamination by hazardous substances. Such liability may include costs of investigating or remediating contamination and damages to natural resources, as well as claims seeking to recover for property damage or personal injury caused by hazardous substances. Such liability may arise from conditions at currently or formerly owned or operated properties, as well as sites where hazardous substances were sent for treatment, disposal or other handling. Liability under RCRA, CERCLA and similar state statutes is without regard to fault, and typically is joint and several, meaning that a person may be held responsible for more than its share, or even all, of the liability involved.
Peabody Energy Corporation
2025 Form 10-K
Table of Contents
The Company may be unable to obtain, renew or maintain permits necessary for its operations, or may only be able to do so subject to conditions that limit the manner in which it runs its operations, which would reduce its production, cash flows and profitability.
Mining operations require numerous governmental permits and approvals. The permitting rules (and the interpretations of these rules) are complex, frequently changing and often subject to discretionary interpretations by regulators, making compliance more difficult or impractical at times. As part of the permitting process, the Company is required to prepare and present to governmental authorities detailed information on the potential impacts of proposed exploration or mining activities. Members of the public, including non-governmental organizations and opposition groups, have statutory rights to comment upon, object to or legally challenge permit applications, environmental impact statements or mining activities. In recent years, the permitting required for coal mining has been the subject of increasingly stringent regulatory and administrative requirements and extensive litigation by environmental groups.
Additionally, the Company’s operations may be affected by sites of cultural heritage significance to indigenous peoples located within or near mining areas. Mining permits may be rescinded or modified, or the Company may voluntarily adjust its mining plans, to mitigate againstadverse impacts to such sites.
The costs, liabilities and potential delays associated with permitting requirements and any related opposition may be substantial and could postpone or disrupt exploration or production, adversely affecting the Company’s coal production, cash flows and profitability. Further, required permits may not be issued or renewed in a timely fashion or at all, or may include conditions that restrict the Company’s ability to efficiently and economically conduct its mining activities, any of which would materially reduce its production, cash flows and profitability.
Concerns about the impacts of coal combustion on global climate are increasingly leading to conditions that have affected and could continue to affect demand for the Company’s products or its securities and its ability to produce, including increased governmental regulation of coal combustion and unfavorable investment decisions by electricity generators.
Public and scientific attention to climate issues, including findings in reports such as the Sixth Assessment Report of the Intergovernmental Panel on Climate Change, has increased scrutiny of GHG emissions, particularly CO 2 emissions from coal-fueled power generation. As a result, governments in the U.S. and abroad are considering or implementing laws and regulations aimed at reducing such emissions.
Future legislation or regulations, such as carbon taxes or other emissions-reduction measures, could prompt electricity generators to shift from coal to other fuel sources. Policies that limit financing for the development of new coal-fueled power plants could adversely impact long-term global demand. The potential financial impact of these developments on Peabody will depend upon the degree to which any such laws or regulations reduce coal use, which in turn will be influenced by the specific requirements of any new laws or regulations, the timing of their implementation, the development and acceptance of CCUS technologies, and the availability of alternative uses for coal. Higher-efficiency coal-fired power plants may also be an option for meeting emissions-related requirements, and several major coal-using countries, including China, India and Japan, have incorporated such technologies into their plans under the Paris Agreement.
The Company’s Board of Directors and management periodically attempt to analyze the potential impact on the Company of as-yet-unadopted, potential laws, regulations and policies. Such analyses require significant assumptions as to the specific provisions of such potential laws, regulations and policies which sometimes show that if implemented in the manner assumed by the analyses, the potential laws, regulations and policies could result in material adverse impacts on the Company’s operations, financial condition or cash flows. Such analyses cannot be relied upon to reasonably predict the quantitative impact that future laws, regulations or other policies may have on the Company’s results of operations, financial condition or cash flows.
Numerous activist groups are devoting substantial resources to anti-coal activities to minimize or eliminate the use of coal as a source of electricity generation, domestically and internationally, thereby further reducing the demand and pricing for coal, and potentially materially and adversely impacting the Company’s future financial results, liquidity and growth prospects.
Several non-governmental organizations have undertaken campaigns to minimize or eliminate the use of coal as a source of electricity generation and have filed lawsuits to stop or delay coal mining activities, including challenges to individual coal leases and the federal coal leasing program. Other lawsuits contest historical and pending regulatory approvals, permits and processes necessary for coal mining or the operation of coal-fueled power plants, including so-called “sue and settle” actions that have resulted in additional regulatory restrictions or processes being implemented without formal rulemaking.
Peabody Energy Corporation
2025 Form 10-K
Table of Contents
These and similar developments have made it more costly and difficult to maintain the Company’s operations. Resulting cost increases and/or substantial or prolongeddeclines in coal prices could reduce the Company’s revenue and profitability, cash flows, liquidity, and value of its coal reserves and resources, and could result in material losses.
The Company’s hedging activities do not cover certain risks and may expose it to earnings volatility and other risks.
The Company is subject to coal price volatility, price volatility on diesel fuel utilized in its mining operations and foreign currency exchange rate risk associated with the Australian dollar. The Company hedges certain of these risks through hedging arrangements and may continue in the future to enter into hedging arrangements, including economic hedging arrangements, to manage these risks or other exposures. Since the Company’s existing hedging arrangements do not receive cash flow hedge accounting treatment, all changes in fair value are reflected in current earnings.
The Company’s future success depends upon its ability to continue acquiring and developing coal reserves and resources that are economically recoverable.
Recoverable reserves and resources decline as coal is produced, and the Company has not yet applied for the permits required or developed the mines necessary to use all reported reserves and resources. Moreover, the amount of coal reserves and resources described in Part I, Item 2. “Properties” involves the use of certain estimates and those estimates could be inaccurate. Actual production, revenue and expenditures with respect to its coal reserves and resources may vary materially from estimates.
The Company’s future success depends upon it conducting successful exploration and development activities or acquiring properties containing economically recoverable reserves and resources. The Company’s current strategy includes increasing its coal reserves and resources through acquisitions of leases and producing properties and continuing to use its existing properties and infrastructure. In certain locations, leases for oil, natural gas and coalbed methane reserves are located on, or adjacent to, some of the Company’s coal reserves and resources, potentially creating conflicts with other mineral interest holders. These parties could prevent, delay or increase the cost of developing the Company’s coal reserves and resources or seek damagesallegingimpairment of their interests. Additionally, the U.S. federal government limits the amount of federal land that may be leased by any company to 75,000 acres in any one state and 150,000 acres nationwide. As of December 31, 2025, the Company leased a total of 42,167 acres from the federal government subject to those limitations.
Planned mine development projects and acquisition activities may not yield significant additional reserves and resources, and the Company may not succeed in developing additional mines. Most mining operations are conducted on properties owned or leased by the Company, and defects in title or boundaries could materially and adversely affect the Company’s right to mine and result in unanticipated costs. Developing reserves and resources requires the Company to own the rights to the related surface property and receive various governmental permits, which may not be granted or renewed in a timely manner or at all. The Company may be unable to secure new leases, obtain mining contracts for properties containing additional coal reserves and resources or maintain its leasehold interest in properties on which mining operations have not commenced or have not met minimum quantity or product royalty requirements. From time to time, the Company has experienced litigation with lessors of its coal properties and with royalty holders, and its permit applications and federal and state coal leases have been challenged, causing production delays.
To the extent that the Company’s existing sources of liquidity are insufficient to fund its planned mine development projects or coal reserve and resource acquisition activities, the Company may need to access capital markets, which may be unavailable or available only on unfavorable terms. If the Company is unable to fund these activities, it may not be able to maintain or increase its existing production rates and could be forced to change its business strategy, which could have a material adverse effect on its financial condition, results of operations and cash flows.
The Company faces numerous uncertainties in estimating its coal reserves and resources and inaccuracies in its estimates could result in lower than expected revenue, higher than expected costs and decreased profitability.
Coal is economically recoverable only when the price at which it can be sold exceeds the costs and expenses of mining and selling the coal. The costs and expenses of mining and selling the coal are determined on a mine-by-mine basis, and as a result, the price at which its coal is economically recoverable varies based on the mine. Forecasts of the Company’s future performance rely in part on estimates of its recoverable coal reserves and resources, which are based on engineering, economic and geological data assembled and analyzed by Company personnel and third-party experts, which includes various engineers and geologists. The Company's estimates are also subject to SEC regulations regarding classification of reserves and resources, including subpart 1300 of Regulation S-K. The reserve and resource estimates as to both quantity and quality are updated from time to time to reflect production of coal from the reserves and resources and new drilling or other data received.
Peabody Energy Corporation
2025 Form 10-K
Table of Contents
Estimating the quantity, quality and economically recoverable coal reserves and resources involves numerous uncertainties, many of which are beyond the Company’s control. Estimates depend on a variety of factors and assumptions that, if incorrect, may result in an estimate that varies considerably from actual results. These include:
• geologic and mining conditions that may not be fully identified by available exploration data and may differ from the Company’s experience in areas it currently mines;
• demand for coal;
• current and future market prices for coal, contractual arrangements, operating costs and capital expenditures;
• severance and excise taxes, royalties and development and reclamation costs;
• future mining technology;
• regulatory requirements;
• the ability to obtain, maintain and renew all required permits;
• employee health and safety considerations; and
• historical production from comparable areas.
The conversion of reported mineral resources to mineral reserves or the reclassification of reported mineral resources from lower to higher levels of geological confidence should not be assumed. Actual coal tonnage recovered, as well as related revenue and expenditures, from identified reserve and resource areas or properties may vary materially from estimates. Thus, these estimates may not accurately reflect its actual reserves and resources. Any material inaccuracy in the Company’s estimates related to its coal reserves and resources could result in lower than expected revenue, higher than expected costs or decreased profitability which could materially and adversely affect its business, results of operations, financial position and cash flows.
Joint ventures, partnerships or non-managed operations may not be successful and may not comply with the Company’s operating standards.
The Company participates in several joint venture and partnership arrangements and may enter into others, all of which necessarily involve risk. Regardless of whether the Company holds a majority interest or maintains operational control, its partners may, among other things, (1) have economic or business interests or goals that are inconsistent with, or opposed to, the Company’s; (2) seek to block actions that the Company believes are in its or the joint venture’s best interests; or (3) be unable or unwilling to fulfill their obligations under the joint venture or other agreements, such as contributing capital, any of which may adversely impact the Company’s results of operations and its liquidity or impair its ability to recover its investments.
In jointly controlled or non-managed ventures, the Company may provide expertise and advice but have limited control over compliance with its operational standards. The Company also utilizes contractors across its mining platform, and may be similarly limited in its ability to control their operational practices. Failure by non-controlled joint venture partners or contractors to adhere to operational standards that are equivalent to those of the Company could unfavorably affect safety results, operating costs and productivity and adversely impact its results of operations and reputation.
The Company’s expenditures for postretirement benefit obligations could be materially higher than it has predicted if its underlying assumptions prove to be incorrect.
The Company provides postretirement health and life insurance benefits to eligible retirees, and its total accumulated postretirement benefit obligation was a liability of $121.1 million as of December 31, 2025, including $11.9 million classified as a current liability.
These obligations are actuarially determined using assumptions regarding discount rates, future cost trends, mortality tables, demographics and expected rates of return on plan assets. The discount rate is based on a hypothetical bond portfolio designed to approximate the timing of future cash flows necessary to service its liabilities. A decrease in the discount rate could increase the present value of these obligations, thereby raising future costs. The Company also makes assumptions about future medical cost trends based on historical claims data. If these assumptions do not materialize as expected, actual cash expenditures and costs that it incurs could differ materially from its current estimates. Regulatory changes or modifications to government-provided healthcare benefits could further increase the Company’s obligation.
The Company develops its actuarial determinations of liabilities using actuarial mortality tables it believes best fit its population’s actual results. In deciding which mortality tables to use, the Company periodically reviews its population’s actual mortality experience and evaluates results against its current assumptions as well as consider recent mortality tables published by the Society of Actuaries Retirement Plans Experience Committee. If the Company’s mortality tables do not anticipate its population’s mortality experience as accurately as expected, actual cash expenditures and costs that the Company incurs could differ materially from its current estimates.
Peabody Energy Corporation
2025 Form 10-K
Table of Contents
Changes to trade policy, including tariff and customs regulations, or failure to comply with such regulations may have an adverse effect on the Company’s business, financial condition and results of operations.
As a multinational corporation, Peabody conducts a significant amount of business that could be impacted by changes in U.S. or foreign trade policies, including tariffs, international trade agreements and economic sanctions. Such changes may adversely impact the U.S. economy or certain sectors thereof; the economy of another country in which the Company operates or certain sectors thereof; or the coal industry and the global demand for coal. The Company cannot predict the extent to which the U.S. or other countries will impose new or additional quotas, duties, tariffs, taxes or other similar restrictions upon the import or export of its products, nor can it predict the terms of future trade policies or renegotiated trade agreements. The continued adoption or expansion of trade restrictions, the emergence of a trade war or other governmental actions related to tariffs or trade agreements could adversely affect demand for the Company’s coal, increase its costs, impact its customers and weaken the economies in which the Company operates. Any of these developments could have a material adverse effect on the Company’s business, financial condition and results of operations.
Peabody is exposed to risks associated with political or international conflicts.
Political or international conflicts can result in worldwide geopolitical and macroeconomic uncertainty. The Company cannot predict the ultimate impacts related to such conflicts. Prolonged or expanding conflicts could adversely affect macroeconomic conditions, including but not limited to, volatile coal pricing, trade flow disruptions resulting from sanctions, supply chain disruptions, increased costs, and decreased business spending. Furthermore, political or international conflicts could disrupt Peabody’s or its business partners’ global technology infrastructure, including through cybersecurity attacks or cyber-intrusions; lead to adverse changes in international trade policies and relations; increase regulatory enforcement; impede Peabody’s ability to implement and execute its business strategy; heighten terrorist activity risks; amplify exposure to foreign currency fluctuations; and cause constraints, volatility or disruption in capital markets. Any of these developments could have a material adverse effect on the Company’s business, results of operations, cash flows and financial condition.
Peabody could be exposed to significant liability, reputational harm, loss of revenue, increased costs or other risks if it experiences cybersecurity attacks or other security breaches that disrupt its operations or result in the dissemination of proprietary or confidential information about the Company, its customers or other third-parties.
Peabody has implemented physical and cybersecurity protocols intended to protect its operations, the Company’s and its counterparties’ confidential information and information related to identifiable individuals againstunauthorized access. Despite such efforts, the Company may be subject to security breaches which could result in unauthorized access to its facilities or the information it is trying to protect.
Because Peabody operates energy-related assets, it faces heightened cybersecurity risks from sophisticated adversaries, including nation-state actors. The Company’s information systems, and those of key third parties, are vulnerable to malicious and intentionalcyberattacks involving malware (such as ransomware), accidental or inadvertentincidents, the exploitation of security vulnerabilities or “bugs” in software or hardware, social engineering/phishing attacks, and insider malfeasance, among other scenarios. Cyberattacks are increasing in frequency and sophistication, due in part to the growing use of artificial intelligence (AI) tools. The use of AI by the Company, its customers or third parties may introduce additional vulnerabilities. As attack methodologies evolve rapidly and may evade detection, Peabody may be unable to anticipate, prevent, identify, investigate or remediate future incidents with its current resources.
Unauthorized physical access to Company facilities or electronic access to its information systems could result in, among other things, unfavorable publicity, litigation (including class actions), regulatory investigations or enforcement actions, loss of competitive advantages, operational disruptions, loss of customers, financial obligations for damages related to data theft or misuse and significant investigation and remediation costs. Any of these outcomes could have a substantial impact on the Company’s results of operations, financial condition or cash flows.
Peabody’s information and operational technology systems may be adversely affected by disruptions, damage, failure and risks associated with implementation and integration, including of new technologies.
Peabody could experience system or network disruptions if new or upgraded information or operational technology systems are defective, improperly installed or not effectively integrated into its operations. System modification failures could have a material adverse effect on the Company’s business, financial position and results of operations and could, if not successfully implemented, adversely impact the effectiveness of its internal control over financial reporting.
Peabody Energy Corporation
2025 Form 10-K
Table of Contents
Peabody initiated the process of upgrading its enterprise resource planning (ERP) system, which is expected to be completed during the first quarter of 2026. The upgraded ERP system may necessitate the implementation of new internal controls and modifications to existing internal control frameworks and procedures. Additionally, any disruptions in the upgrade process or operation of the upgraded ERP system could lead to business interruptions, negatively affecting the Company’s ability to serve customers and manage its operations efficiently, which could have a material adverse impact on the Company’s business, financial position and results of operations. Peabody has taken steps to mitigate these risks, including thorough testing and continuous monitoring of the upgrade process. However, there can be no assurance that these measures will be successful in preventing potential disruptions.
Further, Peabody increasingly relies on its information technology infrastructure for electronic communications among its worldwide operations, personnel, customers and suppliers, due in part to remote working and flexible working arrangements. These information technology systems, some of which are managed by third parties outside of the Company’s control, have been and may in the future be susceptible to damage, disruptions or shutdowns. As threats to information technology infrastructure evolve rapidly, existing controls and procedures may become inadequate, requiring the Company to devote additional resources to modify or enhance its systems in the future.
The Company is incorporating artificial intelligence technologies into its processes and these technologies may present business, compliance and reputational risks.
Peabody increasingly utilizes AI, machine learning, and automated decision-making to improve its processes. Issues arising from the development or use of these technologies, combined with an evolving and uncertain regulatory environment, may lead to increased governmental or regulatory scrutiny, litigation, confidentiality or security risks, reputational harm, liability, or other adverse consequences that could adversely affect the Company’s business, results of operations and financial condition.
AI and machine-learning technology may also be improperly used by employees without the Company’s knowledge. Such misuse could result in unauthorized use or disclosure of confidential or proprietary information, or the generation of content that appears accurate but is in fact incorrect, misleading, biased, or otherwise flawed. These outcomes could harm Peabody’s reputation and expose the Company to additional risks. As AI becomes more prominent in the Company’s operations, Peabody may need to invest additional resources to enhance digital security, train employees, deploy protective technologies and engage third-party experts. The Company may face challenges in anticipating or mitigating all potential harms associated with AI.
It is not possible to predict all risks related to the use of AI, machine-learning and automated decision-making. Changes in regulatory frameworks or stakeholder expectations may limit the Company’s ability to develop or use such technologies or subject Peabody to liability. Failure to successfully integrate AI into business processes or to keep pace with rapidly evolving AI technologies, including attracting and retaining talented data scientists, data engineers, and programmers, could place Peabody at a competitive disadvantage.
The Company is subject to various general operating risks which may be fully or partially outside of its control.
The Company’s results of operations, financial position or cash flows could be adversely impacted by various general operating risks which may be fully or partially outside of its control. Such risks stem from internal and external sources and include:
• global economic recessions and/or credit market disruptions;
• rising inflation;
• pandemics or other widespread illnesses;
• deterioration of the creditworthiness of its customers or financial counterparties, and their ability to perform under contracts;
• inability of suppliers and other counterparties, including those related to transportation, contract mining, service provision, and coal trading and brokerage, to fulfil the terms of their contracts with the Company;
• reduced availability or increased costs of key supplies, capital equipment or commodities such as diesel fuel, steel, explosives and tires;
• disruptions or increased costs in coal transportation networks, including rail, barge, trucking, overland conveyor, ports and ocean-going vessels;
• new or increased forms of taxation imposed by federal, state, provincial or local governmental authorities, including production taxes, sales-related taxes, royalties, environmental taxes, mining profits taxes and income taxes; and
• uncertainties associated with the Company’s global operating platform, including country and political risks, international regulatory requirements, and foreign currency fluctuations.
Peabody Energy Corporation
2025 Form 10-K
Table of Contents
Risks Related to Peabody’s Capital Structure
The Company may be able to incur more debt, including secured debt, which could increase the risks associated with its indebtedness.
As of December 31, 2025, the Company had approximately $320.0 million of unsecured indebtedness outstanding, excluding finance leases and debt issuance costs, and an additional $320.0 million in revolving commitments.
The Company may be able to incur additional indebtedness in the future, including secured debt. Although covenants under agreements governing the Company’s other indebtedness, including its revolving credit facility and finance leases, limit the Company’s ability to incur additional indebtedness, these restrictions are subject to a number of qualifications and exceptions. In addition, the agreements governing the Company’s other indebtedness do not limit the Company from incurring obligations that do not constitute indebtedness as defined therein.
The degree to which the Company is leveraged could have important consequences, including, but not limited to:
• making it more difficult to pay interest and satisfy its debt obligations;
• increasing borrowing costs;
• increasing vulnerability to general adverse economic, industry or regulatory conditions;
• requiring the dedication of a substantial portion of operating cash flow to be used for debt service, thereby reducing funds available for working capital, capital expenditures, business development or other general corporate requirements;
• limiting the Company’s ability to obtain additional financing to fund future working capital, capital expenditures, business development or other general corporate requirements;
• making it more difficult to obtain surety bonds, letters of credit, bank guarantees or other forms of financing, particularly in weak credit markets;
• reducing flexibility in planning for, or reacting to, changes in its business and in the coal industry;
• causing a decline in the Company’s credit ratings; and
• placing the Company at a competitive disadvantage compared to less leveraged competitors.
The terms of the agreements and instruments governing the Company’s debt and surety bonding obligations impose restrictions that may limit its operating and financial flexibility.
The agreements governing the Company’s unsecured debt, revolving credit facility and surety bonding obligations contain certain restrictions and covenants which could adversely affect the Company’s ability to operate its business, as well as significantly affect its liquidity, and therefore could adversely affect its business, financial condition and results of operations.
These restrictions and covenants may limit, among other things, the Company’s ability to:
• incur additional indebtedness;
• pay dividends on or make distributions in respect of stock or make certain other restricted payments, such as share repurchases;
• make capital or other investments;
• enter into agreements that restrict distributions from certain subsidiaries;
• sell or otherwise dispose of assets;
• use for general purposes the cash received from certain allowable asset sales or disposals;
• enter into transactions with affiliates;
• create or incur liens;
• merge, consolidate or sell all or substantially all of its assets; and
• receive dividends or other payments from subsidiaries in certain cases.
Peabody Energy Corporation
2025 Form 10-K
Table of Contents
The Company’s ability to comply with these restrictions or covenants may be affected by events beyond its control. A breach of any of these restrictions or covenants together with the expiration of any applicable cure period, could result in a default. If any such default occurs, subject to applicable grace periods, the holders of the Company’s indebtedness may elect to declare such indebtedness, together with accrued interest and other amounts payable thereunder, to be immediately due and payable. In addition, the lenders under the Company’s revolving credit facility could elect to require the cash collateralization of any outstanding letters of credit. If the Company’s indebtedness is accelerated, it may not have sufficient cash flows and capital resources to repay such indebtedness or be able to restructure or refinance such indebtedness. Even if the Company were able to restructure its indebtedness or obtain additional capital or new or replacement financing, it may not be on commercially reasonable terms or on terms that are acceptable to the Company.
In this regard, if the Company experiences a default under the terms of its unsecured debt, revolving credit facility or surety bonding obligations for any reason, its business, financial condition and results of operations could be materially and adversely affected. In addition, complying with such terms may make it more difficult for the Company to successfully execute its business strategy, including by making it more difficult to compete against competitors who are not subject to such financial restrictions.
The number and viability of financing and insurance alternatives available to the Company may be significantly impacted by unfavorable lending and investment policies adopted by financial institutions and insurance companies in response to concerns about the environmental impacts of coal combustion, and negative views around the Company’s environmental and social practices and related governance considerations could harm its perception among investors or result in the exclusion of its securities from consideration by those investors.
Certain banks, other financing sources and insurance companies have limited financing and insurance coverage for the development of new coal-fueled power plants and for coal producers and utilities that derive a majority of their revenue from coal, particularly thermal coal. This may adversely impact the future global demand for coal. Increasingly, such decisions are influenced by non-standardized sustainability scores, ratings and benchmarking studies provided by various organizations evaluating environmental, social and governance matters. Further, there have been efforts in recent years by members of the general financial and investment communities, including investment advisors, sovereign wealth funds, public pension funds, universities and other institutional investors, to promote divestment from fossil fuel extraction companies or companies with low sustainability ratings, and pressure lenders to restrict financing to such companies.
These efforts may have adverse consequences, including, but not limited to:
• restricting the Company’s access to capital and financial markets in the future;
• reducing the demand for, and the price of, its equity securities;
• increasing borrowing costs;
• causing a decline in the Company’s credit ratings;
• reducing the availability of, and/or increasing the cost of, third-party insurance;
• increasing the Company’s retention of risk through self-insurance;
• making it more difficult to obtain surety bonds, letters of credit, bank guarantees or other financing; and
• limiting flexibility in business development activities such as mergers, acquisitions and divestitures.
Various states have enacted, or are considering enacting, laws to sanction, or require public funds to divest from, financial institutions that restrict investments in fossil fuel companies based off of extra-regulatory environmental or social factors, or to require such institutions to provide “fair access” to financial services to companies regardless of industry. While similar federal regulations had been proposed in the past, they have either been suspended or repealed, and the future direction of such efforts remains uncertain. As such, the final status of efforts to divest or promote the divestment from the fossil fuel extraction market is unclear, but any such efforts may adversely affect the demand for and price of the Company’s securities and impact the Company’s access to the capital and financial markets.
Peabody Energy Corporation
2025 Form 10-K
Table of Contents
Risks Related to Ownership of Peabody’s Securities
The price of Peabody’s securities may be volatile.
The price of Peabody’s common stock (Common Stock) may fluctuate due to a variety of market and industry factors that may materially reduce the market price of its Common Stock regardless of the Company’s operating performance, including, among others:
• general market conditions;
• actual or anticipated fluctuations in Peabody’s quarterly and annual results and those of industry peers;
• industry cycles and trends;
• mergers and strategic alliances in the coal industry;
• changes in government regulation;
• potential or actual military conflicts or acts of terrorism;
• securities analysts’ failure to publish research or to accurately forecast the Company’s results;
• market perception of development projects;
• changes in accounting principles;
• announcements concerning Peabody or its competitors;
• trading activity by insiders or significant shareholders;
• limited or excess trading liquidity;
• operational incidents; and
• investor sentiment regarding the Company’s policies or efforts on environmental, social or governance matters.
As a result of these factors, investors in Peabody’s Common Stock may be unable to resell their stock at or above the price they paid or at all. Further, Peabody could be the subject of securities class action litigation due to any such stock price volatility, which could divert management’s attention and have a material adverse effect on its results of operations.
Peabody’s Common Stock is subject to dilution and may be subject to further dilution in the future.
Peabody’s Common Stock is subject to dilution from its convertible senior debt and its long-term incentive plan. In addition, Peabody may issue equity securities in connection with future investments, acquisitions or capital raising transactions. Such issuances or grants could constitute a significant portion of the then-outstanding Common Stock, which may result in significant dilution in ownership of Common Stock. Additionally, if Peabody does issue equity securities, new investors could gain rights preferences and privileges senior to the holders of Peabody’s Common Stock.
There may be circumstances in which the interests of a significant stockholder could be in conflict with other stakeholders’ interests.
Circumstances may arise in which the interests of a significant stockholder may be in conflict with the interests of the Company’s other stakeholders. A significant stockholder may exert substantial influence over the Company to cause the Company to take action that aligns with their interests, for example, to pursue or prevent acquisitions, divestitures or other transactions, including the issuance or repurchase of additional shares or debt, that, in its judgment, could enhance its investment in Peabody or another company in which it invests. Such transactions may advance the interests of the significant stockholder and not necessarily those of other stakeholders, which might adversely affect Peabody or other holders of its Common Stock or debt instruments.
The future payment of dividends on Peabody’s stock or future repurchases of its stock is dependent on a number of factors and cannot be assured.
In 2023, the Company’s Board of Directors approved a shareholder return framework that includes share repurchases and cash dividends, and a share repurchase program authorizing repurchases of up to $1.0 billion of the Company’s common stock. Under the share repurchase program authorized by the Board, the Company may purchase shares of common stock from time to time at management’s discretion through open market purchases, privately negotiated transactions, block trades, accelerated or other structured share repurchase programs, or other means. The manner, timing and pricing of any share repurchase transactions will be based on a variety of factors, including market conditions, applicable legal requirements and alternative opportunities that the Company may have for the use or investment of capital. Future cash dividends and repurchases will depend upon Peabody’s earnings, economic conditions, liquidity and capital requirements, and other factors, including its leverage and other financial ratios. Accordingly, the Company cannot make any assurance that future dividends will be paid or future repurchases will be made.
Peabody Energy Corporation
2025 Form 10-K
Table of Contents
General Risk Factors
Acquisitions and divestitures are a potentially important part of the Company’s long-term strategy, subject to its investment criteria, and involve a number of risks, any of which could cause the Company not to realize the anticipated benefits.
Based on its set of investment criteria, the Company has engaged in, and may continue to pursue, acquisition or divestiture activity intended to enhance shareholder value or provide potential strategic benefits. If the Company fails to accurately estimate the future results and value of these assets or any other acquired or divested business or assets and the related risk associated with such a transaction, or are unable to successfully close any acquisition or integrate the businesses or assets it acquires, its business, financial condition or results of operations could be negatively affected. Moreover, any transactions the Company pursues could materially impact its liquidity and an acquisition could increase capital resource needs and may require it to incur indebtedness, seek equity capital or both. The Company may not be able to satisfy these liquidity and capital resource needs on acceptable terms or at all. In addition, future acquisitions could result in its assuming significant long-term liabilities, including potentially unknown liabilities, relative to the value of the acquisitions.
The outcome of arbitration proceedings related to the termination of agreements to acquire properties from Anglo American plc could adversely affect the Company’s business, results of operations, and its financial condition.
On November 25, 2024, Peabody entered into definitive agreements (the Purchase Agreements) with Anglo American plc, a United Kingdom public limited company (Anglo), to acquire a portion of the assets and businesses associated with Anglo’s metallurgical coal portfolio in Australia. On August 19, 2025, Peabody terminated the Purchase Agreements following Peabody’s prior delivery of a notice of a Material Adverse Change (MAC) as a result of an ignition event at the Moranbah North mine on March 31, 2025, which had led to the closure of the mine. Following Peabody’s termination of the Purchase Agreements, Anglo returned $29.0 million of the $75.0 million deposit previously paid by Peabody, and Peabody has demanded the outstanding portion of the deposit also be returned.
On September 23, 2025, various subsidiaries of Anglo initiated International Chamber of Commerce arbitration proceedings in London, United Kingdom, against Peabody and certain of its affiliates. Anglo’s complaintalleges, among other things, that Peabody wrongfullyterminated the Purchase Agreements and seeks, among other things, declarations that the ignition event at the Moranbah North mine did not constitute a MAC, as well as damages for losses in an unspecified amount, plus costs and interest.
The outcome of these proceedings is inherently uncertain and may materially and adversely affect the Company’s business, results of operations, and/or its financial condition. While the Company remains confident that a MAC occurred, entitling the Company to terminate the Purchase Agreements, arbitration outcomes are unpredictable and may include monetary damages or other remedies unfavorable to the Company. Additionally, the costs associated with the arbitration process, including legal fees and potential settlement or award payments, could be significant. There can be no assurance as to the timing or final resolution of the arbitration proceedings.
The Company may not be able to fully utilize its deferred tax assets.
The Company is subject to income and other taxes in the U.S. and numerous foreign jurisdictions, most significantly Australia. As of December 31, 2025, the Company had gross deferred income tax assets, including net operating loss (NOL) carryforwards, and liabilities of $1,616.5 million and $171.4 million, respectively, as described further in Note 7. “Income Taxes” to the accompanying consolidated financial statements. At that date, the Company also had recorded a valuation allowance of $1,469.2 million.
The Company’s ability to use its U.S. NOL carryforwards may be limited if it experiences an “ownership change” as defined in Section 382 of the Internal Revenue Code of 1986, as amended. An ownership change generally occurs if certain stockholders increase their aggregate percentage ownership of a corporation’s stock by more than 50 percentage points over their lowest percentage ownership at any time during the testing period, which is generally the three-year period preceding any potential ownership change.
Although the Company may be able to utilize some or all of those deferred tax assets in the future if it has income of the appropriate character in those jurisdictions (subject to loss carryforward and tax credit expiry, in certain cases), there is no assurance that it will be able to do so. Further, the Company is presently unable to record tax benefits on future losses in the U.S. until such time as sufficient income is generated by its operations in those jurisdictions to support the realization of the related net deferred tax asset positions. The Company’s results of operations, financial condition and cash flows may adversely be affected in future periods by these limitations.
Peabody Energy Corporation
2025 Form 10-K
Table of Contents
Peabody’s certificate of incorporation and by-laws include provisions that may discourage a takeover attempt.
Provisions contained in Peabody’s certificate of incorporation and by-laws and Delaware law could make it more difficult for a third-party to acquire it, even if doing so might be beneficial to its stockholders. Provisions of Peabody’s by-laws and certificate of incorporation impose various procedural and other requirements that could make it more difficult for stockholders to effect certain corporate actions. These provisions could limit the price that certain investors might be willing to pay in the future for shares of its Common Stock and may have the effect of delaying or preventing a change in control.
Diversity in interpretation and application of accounting literature in the mining industry may impact the Company’s reported financial results.
The mining industry has limited industry-specific accounting literature and, as a result, the Company understands diversity in practice exists in the interpretation and application of accounting literature to mining-specific issues. As diversity in mining industry accounting is addressed, the Company may need to restate its reported results if the resulting interpretations differ materially from its current accounting practices. Refer to Note 1. “Summary of Significant Accounting Policies” to the accompanying consolidated financial statements for a summary of the Company’s significant accounting policies.
best
Peabody Energy Corporation
2025 Form 10-K
Table of Contents
Peabody believes non-GAAP measures are used by investors to measure its operating performance. These measures are not intended to serve as alternatives to U.S. GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies. Refer to the “Reconciliation of Non-GAAP Financial Measures” section contained within this Item 7 for definitions and reconciliations to the most comparable measures under U.S. GAAP.
Overview
In 2025, Peabody sold 122.0 million tons of coal. As of December 31, 2025, the Company reports its results of operations primarily through the following reportable segments: Seaborne Thermal, Seaborne Metallurgical, Powder River Basin and Other U.S. Thermal.
The Company’s seaborne operating platform is primarily export focused with customers spread across several countries, with a portion of its thermal and metallurgical coal sold within Australia. Generally, revenue from individual countries varies year by year based on electricity and steel demand, the strength of the global economy, governmental policies and several other factors, including those specific to each country. The Company classifies its seaborne mines within the Seaborne Thermal or Seaborne Metallurgical reportable segments based on the primary customer base and coal reserve type of each mining operation. A small portion of the coal mined by the Seaborne Thermal reportable segment is of a metallurgical grade. Similarly, a small portion of the coal mined by the Seaborne Metallurgical reportable segment is of a thermal grade. Additionally, the Company may market some of its metallurgical coal products as a thermal coal product from time to time depending on market conditions. Peabody’s Seaborne Thermal and Seaborne Metallurgical reportable segments contributed approximately 53% of the Company’s total Adjusted EBITDA from its mining operations during the year ended December 31, 2025.
The Company’s Seaborne Thermal operations consist of mines in New South Wales, Australia. The mines in that reportable segment utilize surface extraction processes to mine low-sulfur, high Btu thermal coal. Prior to September 2025, when the Wambo Underground Mine ceased production, the reportable segment also used underground extraction processes.
The Company’s Seaborne Metallurgical operations consist of mines in Queensland, Australia, one in New South Wales, Australia and one in Alabama, USA. The mines in that reportable segment utilize both surface and underground extraction processes to mine various qualities of metallurgical coal. The metallurgical coal qualities include hard coking coal, semi-hard coking coal, semi-soft coking coal and pulverized coal injection coal.
The Company’s thermal operations in the U.S. are focused on the mining, preparation and sale of thermal coal, sold primarily to electric utilities in the U.S. under long-term contracts, with a relatively small portion sold as international exports as conditions warrant. The Company’s Powder River Basin operations consist of its mines in Wyoming. The mines in that reportable segment are characterized by surface mining extraction processes, coal with a lower sulfur content and Btu and higher customer transportation costs (due to longer shipping distances). The Company’s Other U.S. Thermal operations reflect the aggregation of its Illinois, Indiana, New Mexico and Colorado mining operations. The mines in that reportable segment are characterized by a mix of surface and underground mining extraction processes, coal with a higher sulfur content and Btu and lower customer transportation costs (due to shorter shipping distances). Geologically, the Company’s Powder River Basin operations mine sub-bituminous coal deposits and its Other U.S. Thermal operations mine both bituminous and sub-bituminous coal deposits. Peabody’s Powder River Basin and Other U.S. Thermal reportable segments contributed approximately 47% of the Company’s total Adjusted EBITDA from its mining operations during the year ended December 31, 2025.
Corporate and Other includes selling and administrative expenses, results from equity method investments, trading and brokerage activities, minimum charges on certain transportation-related contracts, the closure of inactive mining sites, the impact of foreign currency remeasurement and certain commercial matters.
Resource Management. As of December 31, 2025, Peabody controlled approximately 2.0 billion tons of proven and probable coal reserves, 3.5 billion tons of coal resources and approximately 335,000 acres of surface property through ownership and lease agreements. The Company has an ongoing asset optimization program whereby its property management group regularly reviews these coal reserves, coal resources and surface properties for opportunities to generate earnings and cash flow through the sale or exchange of non-strategic coal reserves, coal resources and surface lands. These surface lands include acres where Peabody has completed post-mining reclamation. In addition, the Company generates revenue through royalties from coal reserves and oil and gas rights leased to third parties, farm income from surface lands under third-party contracts and lease income from surface lands under contracts with renewable energy ventures.
Peabody Energy Corporation
2025 Form 10-K
Table of Contents
Middlemount Mine. Peabody owns a 50% equity interest in Middlemount, which owns the Middlemount Mine in Queensland, Australia. The mine predominantly produces semi-hard coking coal and low-volatile pulverized coal injection (LV PCI) coal for sale into seaborne coal markets through Abbot Point Coal Terminal, with some capacity also secured at Dalrymple Bay Coal Terminal. Mining operations first commenced at the Middlemount Mine in late 2011. During the years ended December 31, 2025 and 2024, the mine sold 1.5 million and 1.3 million tons of coal, respectively (on a 50% basis).
Summary
Pricing during the year ended December 31, 2025 is set forth in the table below.
High
Low
Average
December 31, 2025
February 13, 2026
Premium low-vol hard coking coal (Premium HCC) (1)
The seaborne pricing included in the table above is not necessarily indicative of the pricing the Company realized during the year ended December 31, 2025 due to quality differentials and a portion of its seaborne sales being executed through annual and multi-year international coal supply agreements that contain provisions requiring both parties to renegotiate pricing periodically, with spot, index and quarterly sales arrangements also utilized. The Company’s typical practice is to negotiate pricing for seaborne metallurgical coal contracts on a quarterly, spot or index basis and seaborne thermal coal contracts on an annual, spot or index basis.
In the U.S., the pricing included in the table above is also not necessarily indicative of the pricing the Company realized during the year ended December 31, 2025 since the Company generally sells coal under long-term contracts where pricing is determined based on various factors. Such long-term contracts in the U.S. may vary significantly in many respects, including price adjustment features, price reopener terms, coal quality requirements, quantity parameters, permitted sources of supply, treatment of environmental constraints, extension options, force majeure and termination and assignment provisions. Competition from alternative fuels such as natural gas and other fuel sources may also impact the Company’s realized pricing.
Within the global coal industry, supply and demand for its products and the supplies used for mining are being impacted by recent changes to trade policy, including tariffs and customs regulations. As future developments related to trade policy, including additional or retaliatory tariffs, delays in implementing previously announced changes or ongoing negotiations between countries, are unknown, the global coal industry data for the year ended December 31, 2025 presented herein may not be indicative of their ultimate impacts.
Within the seaborne metallurgical coal market, metallurgical coal prices were mixed during the year ended December 31, 2025. Globally, both steel production and pig iron production (which predominantly utilizes metallurgical coal) declined during the period. In China, lower domestic steel consumption constrained output, while producers in most other countries experienced competitive pressure from increased Chinese steel exports. India was an exception, expanding its steel making capabilities and increasing pig iron output versus the prior year. Metallurgical coal prices were influenced by lower global steel output in 2025, with premium hard coking coal prices averaging lower in 2025 than 2024. However, metallurgical coal supply curtailment events, such as wet weather disruptions in Australia and changing rates of Chinese coal production, at times contributed to seaborne metallurgical coal price support. In addition, geopolitical trends and trade policies, including tariff regimes, continue to influence global metallurgical trade flows. Looking forward, the seaborne metallurgical coal price may remain volatile based on China’s coal production policies, the pace of growth of the Indian steel industry, changing global trade policies and global supply curtailment actions.
Peabody Energy Corporation
2025 Form 10-K
Table of Contents
Within the seaborne thermal coal market, global thermal coal prices were mixed during the year ended December 31, 2025. In China, power generation increased year-over-year through December 31, 2025, however the share of renewables in the generation mix continued to grow, pressuring coal generation. In addition, domestic coal production increased slightly year-over-year, which led to weaker coal import demand through the year ended December 31, 2025. In India, steady domestic coal production, lower import demand and declining coal generation led to stable coal stockpiles. Looking forward, seaborne thermal coal prices may remain volatile based on the outcomes of China’s supply reforms, winter re-stocking activity in the Northern Hemisphere and volatility in global natural gas markets which can impact global thermal coal markets.
In the U.S., overall electricity demand increased over 2% year-over-year. Through the year ended December 31, 2025, electricity generation from thermal coal increased year-over-year, driven by higher natural gas prices and stronger total generation. Coal’s share of electricity generation increased to approximately 16% for the year ended December 31, 2025, while wind and solar’s combined generation share was at 19% and the share of natural gas generation declined to approximately 40%. U.S. coal inventories have declined through December 31, 2025, driven by stronger coal utilization, resulting in stockpiles declining 20 million tons below levels seen at the end of 2024.
Centurion Mine
During 2025, Peabody continued to advance the development of the Centurion Mine, an underground longwall metallurgical coal mine in Queensland, Australia. Full-scale longwall production commenced in February 2026. The mine is expected to enhance both the quantity and quality of the Company’s production from the Seaborne Metallurgical reportable segment.
Arbitration Relating to Terminated Anglo Acquisition
On November 25, 2024, Peabody entered into Purchase Agreements with Anglo, to acquire a portion of the assets and businesses associated with Anglo’s metallurgical coal portfolio in Australia, including Anglo’s interests in the Moranbah North and Grosvenor mines, the Moranbah South development project, the Capcoal complex, the Roper Creek mine and the Dawson complex (comprising the Dawson Main/Central operating mine, the Dawson South operating mine, the Dawson South Exploration project and the Theodore South exploration project, collectively, the Dawson Assets). The Company agreed to, following the prospective closing of the Anglo acquisition, sell the Dawson Assets to Pt Bukit Makmur Mandiri Utama or one of its subsidiaries (BUMA).
On August 19, 2025, Peabody terminated the Purchase Agreements. The termination of the Purchase Agreements followed Peabody’s prior delivery of a notice of a MAC as a result of an ignition event at the Moranbah North mine on March 31, 2025, which had led to the closure of the mine. See Note 1. “Summary of Significant Accounting Policies” and Note 20. “Commitments and Contingencies” to the accompanying consolidated financial statements for further information.
On September 23, 2025, various subsidiaries of Anglo initiated International Chamber of Commerce arbitration proceedings in London, United Kingdom, against Peabody and certain of its affiliates. Anglo’s complaintalleges, among other things, that Peabody wrongfullyterminated the Purchase Agreements and seeks, among other things, declarations that the ignition event at the Moranbah North mine did not constitute a MAC, as well as damages for losses in an unspecified amount, plus costs and interest. Peabody remains confident that a MAC occurred, and that it was entitled to terminate the Purchase Agreements.
Potential Recovery of Rare Earth Elements
Peabody has been evaluating the potential recovery of REEs and CMs, with substantial testing at its Powder River Basin operations. The Company is progressing its REE/CM initiative by conducting testing to evaluate mineral types and concentrations; developing flowsheets in conjunction with technology partners to support technical and economic assessments and produce rare earth products; and collaborating with governmental agencies and departments at the state and federal level. In February 2026, the Wyoming Energy Authority awarded Peabody funding of $6.25 million for a pilot plant using Peabody’s Powder River Basin coal for REE/CM processing.
Results of Operations
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
The decrease in results from continuing operations, net of income taxes for the year ended December 31, 2025 compared to the prior year ($449.6 million) was primarily driven by lower revenue ($375.2 million) due to lower seaborne coal pricing, the prior year insurance recovery at the Shoal Creek Mine ($109.5 million) and increased costs related to the terminated Anglo acquisition ($68.6 million). These unfavorable variances were partially offset by a lower income tax provision ($100.0 million) and lower operating costs and expenses ($86.0 million).
Peabody Energy Corporation
2025 Form 10-K
Table of Contents
Adjusted EBITDA for the year ended December 31, 2025 reflected a year-over-year decrease of $416.8 million.
Tons Sold
The following table presents tons sold:
(Decrease) Increase
Year Ended December 31,
to Volumes
Tons
(Tons in millions)
Seaborne Thermal
Seaborne Metallurgical
Powder River Basin
Other U.S. Thermal
Total tons sold from reportable segments
Corporate and Other
Total tons sold
Supplemental Financial Data
The following table presents supplemental financial data by reportable segment:
Year Ended December 31,
(Decrease) Increase
Revenue per Ton (1)
Seaborne Thermal
Seaborne Metallurgical
Powder River Basin
Other U.S. Thermal
Costs per Ton (1) (2)
Seaborne Thermal
Seaborne Metallurgical
Powder River Basin
Other U.S. Thermal
Adjusted EBITDA Margin per Ton (1) (2)
Seaborne Thermal
Seaborne Metallurgical
Powder River Basin
Other U.S. Thermal
(1) This is an operating/statistical measure not recognized in accordance with U.S. GAAP. Refer to the “Reconciliation of Non-GAAP Financial Measures” section below for definitions and reconciliations to the most comparable measures under U.S. GAAP.
(2) Includes revenue-based production taxes and royalties; excludes depreciation, depletion and amortization; asset retirement obligation expenses; selling and administrative expenses; restructuring charges; asset impairment; amortization of take-or-pay contract-based intangibles; insurance recoveries; and certain other costs related to post-mining activities.
Peabody Energy Corporation
2025 Form 10-K
Table of Contents
Revenue
The following table presents revenue by reportable segment:
(Decrease) Increase
Year Ended December 31,
to Revenue
(Dollars in millions)
Seaborne Thermal
Seaborne Metallurgical
Powder River Basin
Other U.S. Thermal
Corporate and Other
Revenue
Seaborne Thermal. The decrease in segment revenue during the year ended December 31, 2025 compared to the prior year was due to unfavorable realized prices ($245.0 million) and unfavorable volume ($60.4 million) due in part to reductions at the Wilpinjong Mine.
Seaborne Metallurgical. Segment revenue decreased during the year ended December 31, 2025 compared to the prior year due to unfavorable realized prices ($219.2 million), offset by favorable volume ($200.2 million) from the Shoal Creek and Centurion Mines.
Powder River Basin. Segment revenue increased during the year ended December 31, 2025 compared to the prior year due to favorable volume ($72.7 million) resulting from increased demand, offset by unfavorable realized prices ($18.5 million) which were driven by the impact of adjustments to cost pass-through contracts with certain customers resulting from the federal royalty rate reduction included in the OBBBA.
Other U.S. Thermal. The decrease in segment revenue during the year ended December 31, 2025 compared to the prior year was due to unfavorable volume ($43.2 million) resulting from decreased demand, dragline outages at the Bear Run Mine and challenging geological conditions at the Twentymile Mine; decreased revenue from sales contract cancellation settlements ($37.7 million); and unfavorable realized prices ($34.4 million).
Corporate and Other. Segment revenue increased during the year ended December 31, 2025 compared to the prior year due to higher results from trading activities ($7.6 million).
Segment Costs
The following table presents costs by reportable segment:
(Decrease) Increase
Year Ended December 31,
to Total
Segment Costs
(Dollars in millions)
Seaborne Thermal
Seaborne Metallurgical
Powder River Basin
Other U.S. Thermal
Corporate and Other
Total Segment Costs (1)
(1) This is a financial measure not recognized in accordance with U.S. GAAP. Refer to the “Reconciliation of Non-GAAP Financial Measures” section below for definitions and reconciliations to the most comparable measures under U.S. GAAP.
Seaborne Thermal. The decrease in Segment Costs during the year ended December 31, 2025 compared to the prior year was due to lower costs for labor, repairs and outside services ($73.9 million) resulting from timing of maintenance and operational improvements, lower sales related costs ($28.0 million) driven by both lower realized prices and volume, lower leasing expense ($9.0 million) and favorable commodity pricing ($8.0 million); offset by higher recognized costs resulting from sales volume outpacing production volume ($26.0 million).
Peabody Energy Corporation
2025 Form 10-K
Table of Contents
Seaborne Metallurgical. Segment Costs increased during the year ended December 31, 2025 compared to the prior year due to higher variable operational and sales related costs driven by increased volume (1.3 million tons).
Powder River Basin. The increase in Segment Costs during the year ended December 31, 2025 compared to the prior year was primarily due to higher costs for labor, repairs and outside services ($26.7 million) due in part to unplanned dragline outages, haul truck repairs and increased volume (4.9 million tons), offset by lower sales related costs ($16.4 million) which were largely driven by the federal royalty rate reduction on coal production included in the OBBBA.
Other U.S. Thermal. The decrease in Segment Costs during the year ended December 31, 2025 compared to the prior year was driven by lower volume (1.2 million tons) and lower costs for labor ($13.3 million).
Corporate and Other. Segment costs decreased during the year ended December 31, 2025 compared to the prior year primarily due to favorable remeasurement of foreign currency denominated monetary assets, substantially comprised of Australian dollar denominated restricted cash and cash collateral, offset by higher expense from trading activities and lower amortization of prior service credit.
Adjusted EBITDA
The following table presents Adjusted EBITDA for each of the Company’s reportable segments:
(Decrease) Increase to
Year Ended December 31,
Adjusted EBITDA
(Dollars in millions)
Seaborne Thermal
Seaborne Metallurgical
Powder River Basin
Other U.S. Thermal
Corporate and Other
Adjusted EBITDA (1)
(1) This is a financial measure not recognized in accordance with U.S. GAAP. Refer to the “Reconciliation of Non-GAAP Financial Measures” section below for definitions and reconciliations to the most comparable measures under U.S. GAAP.
Seaborne Thermal. Segment Adjusted EBITDA decreased during the year ended December 31, 2025 compared to the same period in the prior year as a result of lower realized prices net of sales price sensitive costs ($227.7 million) and unfavorable volume ($59.5 million), offset by favorable operational costs as described above.
Seaborne Metallurgical. Segment Adjusted EBITDA decreased during the year ended December 31, 2025 compared to the same period in the prior year due to lower realized prices net of sales price sensitive costs ($168.8 million) and the prior year Shoal Creek insurance recovery ($80.8 million), offset by favorable volume.
Powder River Basin. Segment Adjusted EBITDA increased during the year ended December 31, 2025 compared to the same period in the prior year as a result of favorable volume ($38.9 million); lower sales related costs ($16.4 million) as described above; and decreased overburden removal costs ($6.4 million). The increases were offset by higher costs for labor, repairs and outside services as described above.
Other U.S. Thermal. Segment Adjusted EBITDA decreased during the year ended December 31, 2025 compared to the same period in the prior year due to decreased sales contract cancellation settlements ($37.7 million) and lower realized prices net of sales price sensitive costs ($29.8 million).
Peabody Energy Corporation
2025 Form 10-K
Table of Contents
Corporate and Other Adjusted EBITDA. The following table presents a summary of the components of Corporate and Other Adjusted EBITDA:
(Decrease) Increase
Year Ended December 31,
to Income
(Dollars in millions)
Middlemount (1)
Resource management activities (2)
Selling and administrative expenses
Other items, net (3)
Corporate and Other Adjusted EBITDA
(1) Middlemount’s results are before the impact of related changes in amortization of basis difference.
(2) Includes gains (losses) on certain surplus coal reserve, coal resource and surface land sales and property management costs and revenue.
(3) Includes trading and brokerage activities, costs associated with post-mining activities, gains (losses) on certain asset disposals, minimum charges on certain transportation-related contracts, results from the Company’s equity method investment in renewable energy joint ventures, costs associated with suspended operations, holding costs associated with the Centurion Mine, the impact of foreign currency remeasurement and expenses related to the Company’s other commercial activities.
Corporate and Other Adjusted EBITDA increased during the year ended December 31, 2025 compared to the same period in the prior year. Unfavorable variances in Middlemount’s results driven by lower sales pricing and higher selling and administrative expenses were partially offset by higher gains on equipment and land sales ($17.9 million). The increase in other items was driven by the favorable remeasurement of foreign currency denominated monetary assets, substantially comprised of Australian dollar denominated restricted cash and cash collateral ($62.7 million), offset by the lower amortization of prior service credit ($10.9 million) and unfavorable trading results ($6.5 million).
(Loss) Income From Continuing Operations, Net of Income Taxes
The following table presents (loss) income from continuing operations, net of income taxes:
(Decrease) Increase to Income
Year Ended December 31,
(Dollars in millions)
Adjusted EBITDA (1)
Depreciation, depletion and amortization
Asset retirement obligation expenses
Restructuring charges
Costs related to terminated acquisition
Shoal Creek insurance recovery - property damage
Changes in amortization of basis difference related to equity affiliates
Other operating loss
Interest expense, net of capitalized interest
Interest income
Net mark-to-market adjustment on actuarially determined liabilities
Unrealized gains (losses) on foreign currency option contracts
Take-or-pay contract-based intangible recognition
Income tax provision
(Loss) income from continuing operations, net of income taxes
(1) This is a financial measure not recognized in accordance with U.S. GAAP. Refer to the “Reconciliation of Non-GAAP Financial Measures” section below for definitions and reconciliations to the most comparable measures under U.S. GAAP.
Peabody Energy Corporation
2025 Form 10-K
Table of Contents
Depreciation, Depletion and Amortization. The following table presents a summary of depreciation, depletion and amortization expense by reportable segment:
Decrease
Year Ended December 31,
to Income
(Dollars in millions)
Seaborne Thermal
Seaborne Metallurgical
Powder River Basin
Other U.S. Thermal
Corporate and Other
Total depreciation, depletion and amortization
Additionally, the following table presents a summary of the Company’s weighted-average depletion rate per ton for active mines in each of its reportable segments:
Year Ended December 31,
Seaborne Thermal
Seaborne Metallurgical
Powder River Basin
Other U.S. Thermal
Depreciation, depletion and amortization expense increased during the year ended December 31, 2025 compared to the same period in the prior year primarily due to increased depreciation resulting from asset additions and increased depletion expense primarily due to increased volume from the Shoal Creek and Centurion Mines. The changes in the weighted-average depletion rate per ton for the Seaborne Thermal, the Seaborne Metallurgical and the Other U.S. Thermal segments during the year ended December 31, 2025 compared to the same period in the prior year reflect the impact of volume and mix variances across the segments.
Asset Retirement Obligation Expenses. Asset retirement obligation expenses decreased during the year ended December 31, 2025 compared to the same period in the prior year due to favorable revisions to the estimates for closed mines.
Costs Related to Terminated Acquisition. These costs relate to the terminated acquisition of multiple metallurgical coal mines from Anglo. In addition to typical costs, such as legal and professional fees, the charges include commitment and duration fees on the bridge loan facility of $20.8 million and $25.9 million, respectively, during the year ended December 31, 2025. Refer to Note 1. “Summary of Significant Accounting Policies” and Note 20. “Commitments and Contingencies” to the accompanying consolidated financial statements for further information regarding the acquisition, which information is incorporated herein by reference.
Shoal Creek Insurance Recovery - Property Damage . During June 2024, the Company reached a settlement related to the Shoal Creek losses and recorded a $109.5 million insurance recovery, as discussed in Note 16. “Other Events” in the accompanying consolidated financial statements. Of this amount, Adjusted EBITDA excludes an allocated amount applicable to losses recognized at the time of the insurance recovery related to longwall development and equipment deemed inoperable within the affected area of the mine, which consisted of $28.7 million recognized during the year ended December 31, 2023. The remaining $80.8 million, applicable to incremental costs and business interruption recoveries, was included in Adjusted EBITDA for the year ended December 31, 2024.
Interest Income. The decrease in interest income during the year ended December 31, 2025 compared to the prior year was driven by lower average cash balances during the current period.
Net Mark-to-Market Adjustment on Actuarially Determined Liabilities. The gain recorded during the year ended December 31, 2025 was driven by the favorable impacts of changes for the postretirement benefit plans related to updated claims experience and favorable expected future claims costs, based upon recent Centers for Medicare and Medicaid Services direct subsidy announcements ($15.1 million) and mark-to-market gains on pension plan assets ($2.1 million). These increases were offset by negative adjustments to Peabody’s black lung compensation liabilities resulting from increased claims ($4.5 million), decreases to the discount rates for all actuarially determined liabilities ($3.9 million) and unfavorable impacts of medical trend updates for the postretirement benefit plans ($3.8 million).
Peabody Energy Corporation
2025 Form 10-K
Table of Contents
The gain recorded during the year ended December 31, 2024 was driven by the favorable impacts of changes for the postretirement benefit plans related to updated claims experience ($12.4 million) and increases to the discount rates for all actuarially determined liabilities ($5.7 million). These increases were offset by negative adjustments to Peabody’s black lung and traumatic workers’ compensation liabilities resulting from increased claims ($8.8 million) and mark-to-market losses on pension plan assets ($5.4 million).
Unrealized Gains (Losses) on Foreign Currency Option Contracts. Unrealized gains (losses) primarily relate to mark-to-market activity on foreign currency option contracts. For additional information, refer to Note 5. “Derivatives and Fair Value Measurements” to the accompanying consolidated financial statements.
Income Tax Provision . The decrease in the income tax provision recorded during the year ended December 31, 2025 compared to the prior year period was primarily due to lower pretax income from the Company’s tax-paying foreign jurisdictions. Refer to Note 7. “Income Taxes” to the accompanying consolidated financial statements for additional information.
Net (Loss) Income Attributable to Common Stockholders
The following table presents net (loss) income attributable to common stockholders:
(Decrease) Increase
Year Ended December 31,
to Income
(Dollars in millions)
(Loss) income from continuing operations, net of income taxes
Loss from discontinued operations, net of income taxes
Net (loss) income
Less: Net income attributable to noncontrolling interests
Net (loss) income attributable to common stockholders
Net Income Attributable to Noncontrolling Interests . The decrease in net income attributable to noncontrolling interests during the year ended December 31, 2025 compared to the prior year period was primarily due to a decline in the financial results of Peabody’s majority-owned Wambo operation in which there is an outside non-controlling interest.
Diluted Earnings per Share (EPS)
The following table presents diluted EPS:
(Decrease) Increase
Year Ended December 31,
to EPS
Diluted EPS attributable to common stockholders:
(Loss) income from continuing operations
Loss from discontinued operations
Net (loss) income attributable to common stockholders
Diluted EPS is commensurate with the changes in results from continuing operations and discontinued operations during that period. Diluted EPS reflects weighted average diluted common shares outstanding of 121.8 million and 141.9 million for the years ended December 31, 2025 and 2024, respectively.
Peabody Energy Corporation
2025 Form 10-K
Table of Contents
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDA is defined as (loss) income from continuing operations before deducting net interest expense, income taxes, asset retirement obligation expenses and depreciation, depletion and amortization. Adjusted EBITDA is also adjusted for the discrete items that management excluded in analyzing the reportable segments’ operating performance, as displayed in the reconciliations below.
Year Ended December 31,
(Dollars in millions)
(Loss) income from continuing operations, net of income taxes
Depreciation, depletion and amortization
Asset retirement obligation expenses
Restructuring charges
Costs related to terminated acquisition
Shoal Creek insurance recovery - property damage
Changes in amortization of basis difference related to equity affiliates
Other operating loss
Interest expense, net of capitalized interest
Interest income
Net mark-to-market adjustment on actuarially determined liabilities
Unrealized (gains) losses on foreign currency option contracts
Take-or-pay contract-based intangible recognition
Income tax provision
Total Adjusted EBITDA
Total Segment Costs is defined as operating costs and expenses adjusted for the discrete items that management excluded in analyzing each of its reportable segments’ operating performance, as displayed in the reconciliations below:
Year Ended December 31,
(Dollars in millions)
Operating costs and expenses
Unrealized gains (losses) on foreign currency option contracts
Take-or-pay contract-based intangible recognition
Net periodic benefit credit, excluding service cost
Total Segment Costs
Revenue per Ton and Adjusted EBITDA Margin per Ton are equal to revenue by segment and Adjusted EBITDA by segment (excluding insurance recoveries), respectively, divided by segment tons sold. Costs per Ton is equal to Revenue per Ton less Adjusted EBITDA Margin per Ton.
Peabody Energy Corporation
2025 Form 10-K
Table of Contents
The following tables present tons sold, revenue, Total Segment Costs and Adjusted EBITDA by reportable segment:
Year Ended December 31, 2025
Seaborne Thermal
Seaborne Metallurgical
Powder River Basin
Other U.S. Thermal
(Amounts in millions, except per ton data)
Tons sold
Revenue
Total Segment Costs
Adjusted EBITDA
Revenue per Ton
Costs per Ton
Adjusted EBITDA Margin per Ton
Year Ended December 31, 2024
Seaborne Thermal
Seaborne Metallurgical
Powder River Basin
Other U.S. Thermal
(Amounts in millions, except per ton data)
Tons sold
Revenue
Total Segment Costs
Adjusted EBITDA, excluding Shoal Creek insurance recovery
Shoal Creek insurance recovery - business interruption
Adjusted EBITDA
Revenue per Ton
Costs per Ton
Adjusted EBITDA Margin per Ton
Liquidity and Capital Resources
Overview
The Company’s primary source of cash is proceeds from the sale of its coal production to customers. The Company has also generated cash from the sale of non-strategic assets, including coal reserves, coal resources and surface lands, and, from time to time, borrowings under its credit facilities and the issuance of securities. The Company’s primary uses of cash include the cash costs of coal production, capital expenditures, coal reserve lease and royalty payments, debt service costs, finance and operating lease payments, early debt retirements, postretirement plans, take-or-pay obligations, post-mining reclamation obligations, collateral requirements, dividends, share repurchases and selling and administrative expenses.
Any future determinations to return capital to stockholders, such as dividends or share repurchases, will depend on a variety of factors, including the Company’s net income or other sources of cash, liquidity position and potential alternative uses of cash, such as internal development projects or acquisitions, as well as economic conditions and expected future financial results. The Company’s ability to early retire debt, declare dividends or repurchase shares in the future will depend on its future financial performance, which in turn depends on the successful implementation of its strategy and on financial, competitive, regulatory, technical and other factors, general economic conditions, demand for and selling prices of coal and other factors specific to its industry, many of which are beyond the Company’s control.
Peabody Energy Corporation
2025 Form 10-K
Table of Contents
Liquidity
As of December 31, 2025, the Company’s cash and cash equivalents balances totaled $575.3 million, including approximately $413 million held by U.S. subsidiaries, approximately $150 million held by Australian subsidiaries and the remainder held by other foreign subsidiaries in accounts predominantly domiciled in the U.S. A significant majority of the cash held by the Company’s foreign subsidiaries is denominated in U.S. dollars. This cash is generally used to support non-U.S. liquidity needs, including capital and operating expenditures in Australia and payment of the foreign subsidiaries’ share of certain U.S. corporate expenditures. From time to time, the Company may repatriate profits from its foreign subsidiaries to the U.S. in the form of intercompany dividends. During the year ended December 31, 2025, no profits from foreign subsidiaries were repatriated. If foreign-held cash is repatriated in the future, the Company does not expect restrictions or potential taxes will have a material effect to its near-term liquidity.
The Company’s available liquidity decreased to $942.1 million as of December 31, 2025 from $1,072.5 million as of December 31, 2024. Available liquidity was comprised of the following:
December 31,
(Dollars in millions)
Cash and cash equivalents
Revolving credit facility availability
Accounts receivable securitization program availability
Total liquidity
Capital Returns to Shareholders
The Company paid dividends of $36.5 million during the year ended December 31, 2025.
Surety Agreement Amendment and Collateral Requirements
In April 2023, the Company amended its existing agreement with the providers of its surety bond portfolio, dated November 6, 2020. Under the April 2023 amendment, the Company and its surety providers agreed to a maximum aggregate collateral amount based upon bonding levels which will vary prospectively as bonding levels increase or decrease. The amendment also extended the agreement through December 31, 2026. In order to maintain the maximum collateral agreement, the Company must remain compliant with a minimum liquidity test and a maximum net leverage ratio, as measured each quarter. The minimum liquidity test requires the Company to maintain liquidity at the greater of $400 million or the difference between the penal sum of all surety bonds and the amount of collateral posted in favor of surety providers, which was $487.3 million at December 31, 2025. The Company must also maintain a maximum net leverage ratio of 1.5 to 1.0, where the numerator consists of its funded debt, net of cash, and the denominator consists of its Adjusted EBITDA for the trailing twelve months. For purposes of calculating the ratio, only 50% of the outstanding principal amount of the Company’s 3.250% Convertible Senior Notes due March 2028 (the 2028 Convertible Notes) is deemed to be funded debt. The Company’s ability to pay dividends and make share repurchases is also subject to the quarterly minimum liquidity test. The Company is in compliance with such requirements at December 31, 2025.
At December 31, 2025, the Company’s maximum aggregate collateral amount was $509.9 million, which was comprised of $383.6 million in trust accounts and letters of credit of $126.3 million held for the benefit of certain surety providers.
Credit Support Facilities
In February 2022, the Company entered into an agreement, which provides up to $250.0 million of capacity for irrevocable standby letters of credit, primarily to support reclamation bonding requirements. The initial agreement required the Company to provide cash collateral at a level of 103% of the aggregate amount of letters of credit outstanding under the arrangement (limited to $5.0 million total excess collateralization.) Outstanding letters of credit bear a fixed fee in the amount of 0.75% per annum. The Company receives a variable deposit rate on the amount of cash collateral posted in support of letters of credit. The agreement was amended on November 3, 2025, to (i) extend the expiration date to December 31, 2030 and (ii) reduce the required minimum cash collateral amount to 102% of the aggregate amount of letters of credit outstanding under the agreement, provided that in the event the Company’s credit rating falls below certain thresholds, the minimum collateral amount shall increase to 103%. At December 31, 2025, letters of credit of $114.6 million were outstanding under the agreement, which were collateralized by cash of $116.9 million.
Peabody Energy Corporation
2025 Form 10-K
Table of Contents
In December 2023, the Company established cash-backed bank guarantee facilities, primarily to support Australian reclamation bonding requirements. The Company receives a variable deposit rate on the amount of cash collateral posted in support of the bank guarantee facilities, which mature at various dates between 2026 and 2029. At December 31, 2025, the bank guarantee facilities were backed by cash of $208.7 million.
Revolving Credit Facility
The Company established a revolving credit facility with a maximum aggregate principal amount of $320.0 million in revolving commitments by entering into a credit agreement, dated as of January 18, 2024 (the 2024 Credit Agreement), by and among the Company, as borrower, certain subsidiaries of the Company party thereto, PNC Bank, National Association, as administrative agent, and the lenders party thereto.
The revolving commitments and any related loans, if applicable (any such loans, the Revolving Loans), established by the 2024 Credit Agreement terminate or mature, as applicable, on January 18, 2028, subject to certain conditions relating to the Company’s outstanding 2028 Convertible Notes. The Revolving Loans bear interest at a secured overnight financing rate plus an applicable margin ranging from 3.50% to 4.25%, depending on the Company’s total net leverage ratio (as defined under the 2024 Credit Agreement) or a base rate plus an applicable margin ranging from 2.50% to 3.25%, at the Company’s option. Letters of credit issued under the 2024 Credit Agreement incur a combined fee equal to an applicable margin ranging from 3.50% to 4.25% plus a fronting fee equal to 0.125% per annum. Unused capacity under the 2024 Credit Agreement bears a commitment fee of 0.50% per annum. On November 25, 2024, the Company amended the 2024 Credit Agreement to, among other things, permit (i) Peabody’s then-planned acquisition of multiple coal mines from Anglo, (ii) the related bridge loan facility and (iii) the incurrence of additional indebtedness to finance the acquisition, subject to compliance with certain pro forma financial covenants. As further discussed in Note 1. “Summary of Significant Accounting Policies,” Peabody terminated the acquisition with Anglo on August 19, 2025.
As of December 31, 2025, the 2024 Credit Agreement had only been utilized for letters of credit, including $49.2 million outstanding as of December 31, 2025. These letters of credit support the Company’s reclamation bonding requirements, lease obligations, insurance policies and various other performance guarantees as further described in Note 19. “Financial Instruments, Guarantees With Off-Balance-Sheet Risk and Other Guarantees.” Availability under the 2024 Credit Agreement was $270.8 million at December 31, 2025.
The 2024 Credit Agreement contains customary covenants that, among other things and subject to certain exceptions (including compliance with financial ratios), may limit the Company and its subsidiaries’ ability to incur additional indebtedness, make certain restricted payments or investments, sell or otherwise dispose of assets, enter into transactions with affiliates, create or incur liens, and merge, consolidate or sell all or substantially all of their assets. The 2024 Credit Agreement is secured by substantially all assets of the Company and its U.S. subsidiaries, as well as a pledge of two Australian subsidiaries.
Capital Expenditures
For 2026, the Company is targeting total capital expenditures of approximately $340 million.
Indebtedness
The Company’s total indebtedness as of December 31, 2025 and 2024 is presented in the table below.
December 31,
Debt Instrument (defined below, as applicable)
(Dollars in millions)
3.250% Convertible Senior Notes due March 2028 (2028 Convertible Notes)
BUMA Loan Note
Finance lease obligations
Less: Debt issuance costs
Less: Current portion of long-term debt
Long-term debt
The Company’s indebtedness requires estimated contractual principal and interest payments, assuming interest rates in effect at December 31, 2025, of approximately $25 million in 2026, $16 million in 2027, $327 million in 2028 and less than $1 million in 2029 and thereafter.
Peabody Energy Corporation
2025 Form 10-K
Table of Contents
The Company paid cash of $39.5 million, $37.6 million and $61.9 million during the years ended December 31, 2025, 2024, and 2023, respectively, for interest, net of capitalized interest, related to the Company’s indebtedness and financial assurance instruments.
2028 Convertible Notes
On March 1, 2022, through a private offering, the Company issued the 2028 Convertible Notes in the aggregate principal amount of $320.0 million. The 2028 Convertible Notes are senior unsecured obligations of the Company and are governed under an indenture.
The Company used the proceeds of the offering of the 2028 Convertible Notes and available cash to redeem its then-existing senior secured notes and to pay related premiums, fees and expenses relating to the offering and redemptions.
The 2028 Convertible Notes will mature on March 1, 2028, unless earlier converted, redeemed or repurchased in accordance with their terms. The 2028 Convertible Notes bear interest at a rate of 3.250% per year, payable semi-annually in arrears on March 1 and September 1 of each year.
During the fourth quarter of 2025, the Company’s reported common stock prices prompted the conversion feature of the 2028 Convertible Notes. As a result, the 2028 Convertible Notes are convertible at the option of the holders during the first quarter of 2026. It is the Company’s current intent and policy to settle any conversions of the 2028 Convertible Notes through shares of its common stock. As such, the 2028 Convertible Notes are not classified as a current obligation in the accompanying consolidated balance sheets. Through February 18, 2026, the Company has not received any conversion requests and does not anticipate receiving any conversion requests in the near term as the market value of the 2028 Convertible Notes exceeds their conversion value.
Accounts Receivable Securitization Program
As described in Note 19. “Financial Instruments, Guarantees With Off-Balance-Sheet Risk and Other Guarantees” of the accompanying consolidated financial statements, the Company entered into an accounts receivable securitization program during 2017. The securitization program provides up to $225.0 million of funding capacity which is accounted for as a secured borrowing, limited to the availability of eligible receivables, and may be secured by a combination of collateral and the trade receivables underlying the program. Funding capacity under the program may also be utilized for letters of credit in support of other obligations, which has been the Company’s primary utilization. At December 31, 2025, the Company had no outstanding borrowings and $63.4 million of letters of credit outstanding under the program. The Company was not required to post cash collateral under the securitization program at December 31, 2025.
The accounts receivable securitization program was amended in January 2025 to extend its maturity to January 2028.
Other Requirements
The Company will incur significant future cash outflows for certain liabilities related to its prior mining activities and former employees. Such cash flows pertain to postretirement benefit plans, work-related injuries and illnesses, defined benefit pension plans, mine reclamation and end-of-mine closure costs and exploration obligations and are estimated to amount to approximately $110 million in 2026, $90 million in 2027, $85 million in 2028, $65 million in 2029, $75 million in 2030 and $1,318 million thereafter.
The Company has various short- and long-term take-or-pay arrangements in Australia and the U.S. associated with rail and port commitments for the delivery of coal, including amounts relating to export facilities. The estimated future cash flows associated with such arrangements are approximately $113 million in 2026, $115 million in 2027, $105 million in 2028, $75 million in 2029, $55 million in 2030 and $540 million thereafter.
The Company’s operating lease commitments, excluding potential contingent rental amounts, will require cash payments of approximately $41 million in 2026, $35 million in 2027, $29 million in 2028, $19 million in 2029, $12 million in 2030 and $3 million thereafter.
Covenant Compliance
The Company was compliant with all relevant covenants under its debt and other finance agreements at December 31, 2025.
Peabody Energy Corporation
2025 Form 10-K
Table of Contents
Cash Flows
The following table summarizes the Company’s cash flows for the years ended December 31, 2025 and 2024, as reported in the accompanying consolidated financial statements.
Year Ended December 31,
(Dollars in millions)
Net cash provided by operating activities
Net cash used in investing activities
Net cash used in financing activities
Net change in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash at beginning of period
Cash, cash equivalents and restricted cash at end of period
Operating Activities . The decrease in net cash provided by operating activities for the year ended December 31, 2025 compared to the prior year was driven by a year-over-year decrease in cash from collateral arrangements resulting from prior year collateral releases ($156.4 million), costs related to the terminated Anglo acquisition ($68.6 million) and lower cash from mining operations. These decreases were partially offset by a year-over-year increase in operating cash flow from working capital ($302.3 million), primarily attributable to changes in accounts payable and accrued expenses ($195.2 million) driven by prior year income tax payments.
Investing Activities . The decrease in net cash used in investing activities for the year ended December 31, 2025 compared to the prior year was driven by a decrease due to the prior year Wards Well acquisition ($143.8 million), the prior year deposit related to the terminated acquisition ($75.0 million) and the returned deposit related to the terminated acquisition ($29.0 million).
Financing Activities . The decrease in net cash used in financing activities for the year ended December 31, 2025 compared to the prior year was primarily driven by decreases in common stock repurchases ($183.1 million).
Off-Balance-Sheet Arrangements
In the normal course of business, the Company is a party to various guarantees and financial instruments that carry off-balance-sheet risk and are not reflected in the accompanying consolidated balance sheets. Such financial instruments provide support for the Company’s reclamation bonding requirements, lease obligations, insurance policies and various other performance guarantees. The Company periodically evaluates the instruments for on-balance-sheet treatment based on the amount of exposure under the instrument and the likelihood of required performance. The Company does not expect any material losses to result from these guarantees or off-balance-sheet instruments in excess of liabilities provided for in the accompanying consolidated balance sheets.
The following table summarizes the Company’s financial instruments that carry off-balance-sheet risk:
December 31, 2025
Reclamation Support
Other Support (1)
Total
(Dollars in millions)
Surety bonds
Letters of credit (2)
Less: Letters of credit in support of surety bonds (3)
Obligations supported, net
(1) Instruments support obligations related to leases, health care plans, workers’ compensation, property and casualty insurance, customer and vendor contracts and certain restoration ancillary to prior mining activities.
(2) Amounts do not include cash-collateralized letters of credit.
(3) Certain letters of credit serve as collateral for surety bonds at the request of surety bond providers.
Peabody Energy Corporation
2025 Form 10-K
Table of Contents
Not presented in the above table is $ 844.1 million of restricted cash and collateral which are included in the accompanying consolidated balance sheets at December 31, 2025, as described in Note 19. “Financial Instruments, Guarantees With Off-Balance-Sheet Risk and Other Guarantees” of the accompanying consolidated financial statements. Such collateral is primarily in support of the financial instruments noted above, including in relation to the Company’s surety bond portfolio, its collateralized letter of credit agreement, its bank guarantee facilities and amounts held directly with beneficiaries which are not supported by surety bonds. The restricted cash and collateral balance increased $34.3 million during the year ended December 31, 2025 due to a net increase in bonding requirements and the impact of foreign currency rate changes.
At December 31, 2025, the Company had total asset retirement obligations of $754.9 million. Bonding requirement amounts may differ significantly from the related asset retirement obligation because such requirements are calculated under the assumption that reclamation begins currently, whereas the Company’s accounting liabilities are discounted from the end of a mine’s economic life (when final reclamation work would begin) to the balance sheet date.
At December 31, 2025, the Company’s reclamation bonding requirements were supported by approximately $740 million of restricted cash and other balances serving as collateral, which substantially supports the financial liability for final mine reclamation as calculated in accordance with U.S. GAAP.
Guarantees and Other Financial Instruments with Off-Balance Sheet Risk. See Note 19. “Financial Instruments, Guarantees With Off-Balance-Sheet Risk and Other Guarantees” to the accompanying consolidated financial statements for a discussion of the Company’s accounts receivable securitization program and guarantees and other financial instruments with off-balance sheet risk.
Critical Accounting Policies and Estimates
The Company’s discussion and analysis of its financial condition, results of operations, liquidity and capital resources is based upon its consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The Company is also required under U.S. GAAP to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates. The Company bases its estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
Asset Retirement Obligations. The Company’s asset retirement obligations primarily consist of spending estimates for surface land reclamation and support facilities at both surface and underground mines in accordance with applicable reclamation laws and regulations in the U.S. and Australia as defined by each mining permit. Asset retirement obligations are determined for each mine using various estimates and assumptions including, among other items, estimates of disturbed acreage as determined from engineering data, estimates of future costs to reclaim the disturbed acreage and the timing of these cash flows, escalated for inflation and then discounted using a credit-adjusted, risk-free rate. As changes in estimates occur (such as mine plan revisions, changes in estimated costs or changes in timing of the performance of reclamation activities), the revisions to the obligation and asset are recognized at the appropriate credit-adjusted, risk-free rate. If the Company’s assumptions do not materialize as expected, actual cash expenditures and costs that it incurs could be materially different than currently estimated. Moreover, regulatory changes could increase its obligation to perform reclamation and mine closing activities. Amortization associated with the Company’s asset retirement obligation assets of $25.0 million for the year ended December 31, 2025 was included in “Depreciation, depletion and amortization” in the Company’s consolidated statements of operations. Asset retirement obligation expense, consisting of both accretion expense and changes in estimates for the Company’s inactive locations, for the year ended December 31, 2025 was $36.5 million and payments totaled $51.2 million. See Note 11. “Asset Retirement Obligations” to the accompanying consolidated financial statements for additional information regarding the Company’s asset retirement obligations.
Peabody Energy Corporation
2025 Form 10-K
Table of Contents
Impairment of Long-Lived Assets. The Company evaluates its long-lived assets held and used in operations for impairment as events and changes in circumstances indicate that the carrying amount of such assets might not be recoverable. Factors that would indicate potential impairment to be present include, but are not limited to, a sustained history of operating or cash flow losses, an unfavorable change in earnings and cash flow outlook, prolongedadverse industry or economic trends and a significant adverse change in the extent or manner in which a long-lived asset is being used or in its physical condition. The Company generally does not view short-term declines in thermal and metallurgical coal prices as an indicator of impairment for conducting impairment tests because of historic price volatility. However, the Company generally views a sustained trend of depressed coal pricing (for example, over periods exceeding one year) as a potential indicator of impairment. Because of the volatile and cyclical nature of coal prices and demand, it is reasonably possible that coal prices may decrease and/or fail to improve in the near term, which, absent sufficient mitigation such as an offsetting reduction in the Company’s operating costs, may result in the need for future adjustments to the carrying value of its long-lived mining assets and mining-related investments.
Assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. For its active mining operations, the Company generally groups such assets at the mine level, or the mining complex level for mines that share infrastructure. For its development and exploration properties and portfolio of surface land and coal reserve and resource holdings, the Company considers several factors to determine whether to evaluate those assets individually or on a grouped basis for purposes of impairment testing. Such factors include geographic proximity to one another, the expectation of shared infrastructure upon development based on future mining plans and whether it would be most advantageous to bundle such assets in the event of a sale to a third-party.
When indicators of impairment are present, the Company evaluates its long-lived assets for recoverability by comparing the estimated undiscounted cash flows in the LOM plan expected to be generated by those assets under various assumptions to their carrying amounts. If such undiscounted cash flows indicate that the carrying value of the asset group is not recoverable, impairmentlosses are measured by comparing the estimated fair value of the asset group to its carrying amount. As quoted market prices are unavailable for the Company’s individual mining operations, fair value is determined through the use of an expected present value technique based on the income approach, except for non-strategic coal reserves and resources, surface lands and undeveloped coal properties excluded from its long-range mine planning. In those cases, a market approach is utilized based on the most comparable market multiples available. The estimated future cash flows and underlying assumptions used to assess recoverability and, if necessary, measure the fair value of the Company’s long-lived mining assets are derived from those developed in connection with its planning and budgeting process. The Company believes its assumptions to be consistent with those a market participant would use for valuation purposes. The most critical assumptions underlying its projections and fair value estimates include those surrounding future tons sold, coal prices for unpriced coal, production costs (including costs for labor, commodity supplies and contractors), transportation costs, foreign currency exchange rates and a risk-adjusted, cost of capital (all of which generally constitute unobservable Level 3 inputs under the fair value hierarchy), in addition to market multiples for non-strategic coal reserves and resources, surface lands and undeveloped coal properties excluded from the Company’s long-range mine planning (which generally constitute Level 2 inputs under the fair value hierarchy).
No impairment charges related to long-lived assets were recorded for the year ended December 31, 2025. When necessary, the assumptions used are based on the Company’s best knowledge at the time it prepares its analysis but can vary significantly due to the volatile and cyclical nature of coal prices and demand, regulatory issues, unforeseen mining conditions, commodity prices and cost of labor. These factors may cause the Company to be unable to recover all or a portion of the carrying value of its long-lived assets.
The Company identified certain assets with an aggregate carrying value of approximately $64 million at December 31, 2025 in its Other U.S. Thermal segment whose recoverability is most sensitive to customer concentration risk.
Income Taxes . The Company recognizes deferred tax assets and liabilities for the temporary difference between the consolidated financial carrying amounts of existing assets and liabilities and their respective tax bases and consideration of operating loss and tax credit carryforwards. Deferred income taxes are measured using enacted rates in effect for the year in which temporary differences are expected to be recovered or settled. The impact on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. Valuation allowances are provided to reduce deferred tax assets to the amount that will be more likely than not realized. The Company makes judgments and estimates regarding the amount and timing of the reversal of taxable temporary differences, the impact of tax planning strategies and expected future taxable income.
Uncertainty exists regarding tax positions taken in previously filed tax returns which remain subject to examination, along with positions expected to be taken in future returns. The Company recognizes the tax benefit from uncertain tax positions when it is more likely than not that the tax position will be sustained upon examination by the taxing authorities based on the technical merits of the position. Adjustments are made to the uncertain tax positions when facts and circumstances change, such as the closing of a tax audit; change in applicable tax laws, including tax case rulings and legislative guidance; or expiration of the applicable statute of limitations.
Peabody Energy Corporation
2025 Form 10-K
Table of Contents
See Note 7. “Income Taxes” to the accompanying consolidated financial statements for additional information regarding valuation allowances and unrecognized tax benefits.
Contingent liabilities. From time to time, Peabody is subject to legal and environmental matters related to its continuing and discontinued operations and certain historical, non-coal producing operations. In connection with such matters, the Company is required to assess the likelihood of any adverse judgments or outcomes, as well as potential ranges of probable losses.
A determination of the amount of reserves required for these matters is made after considerable analysis of each individual issue. Peabody accrues for legal and environmental matters when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. If a range of possible loss exists and no anticipated loss within the range is more likely than any other anticipated loss, the Company records the accrual at the low end of the range, in accordance with Accounting Standards Codification 450, “Contingencies.”
Peabody provides disclosure surrounding loss contingencies when it believes that it is at least reasonably possible that a material loss may be incurred or an exposure to loss in excess of amounts already accrued may exist. Adjustments to contingent liabilities are made when additional information becomes available that affects the amount of estimated loss, which information may include changes in facts and circumstances, changes in interpretations of law in the relevant courts, the results of new or updated environmental remediation cost studies and the ongoing consideration of trends in environmental remediation costs.
Accrued contingent liabilities exclude claimsagainst third parties and are not discounted. The current portion of these accruals is included in “Accounts payables and accrued expenses” and the long-term portion is included in “Other noncurrent liabilities” in the Company’s consolidated balance sheets. In general, legal fees related to environmental remediation and litigation are charged to expense as incurred. The Company includes the interest component of any litigation-related penalties within “Interest expense” in its consolidated statements of operations. See Note 20. “Commitments and Contingencies” to the accompanying consolidated financial statements for further discussion of the Company’s contingent liabilities.
Newly Adopted Accounting Standards and Accounting Standards Not Yet Implemented
See Note 1. “Summary of Significant Accounting Policies” to the accompanying consolidated financial statements for a discussion of newly adopted accounting standards and accounting standards not yet implemented.
